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Opportunity in RETAILMENT

Opportunity in RETAILMENT. ARTEE Industries Limited March 2013. Nigeria – Africa’s burgeoning economy RETAILMENT – The future The Opportunity The Challenges ARTEE Industries Limited – One of Nigeria’s leading conglomerates. Head points. NIGERIA – Africa’s burgeoning economy .

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Opportunity in RETAILMENT

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  1. Opportunity in RETAILMENT ARTEE Industries Limited March 2013

  2. Nigeria – Africa’s burgeoning economy • RETAILMENT – The future • The Opportunity • The Challenges • ARTEE Industries Limited – One of Nigeria’s leading conglomerates Head points ARTEE Industries Limited - Proprietary & Confidential

  3. NIGERIA – Africa’s burgeoning economy A brief overview ARTEE Industries Limited - Proprietary & Confidential

  4. Nigeria – GDP & GDP Growth Data Source: www.tradingeconomics.com / WORLD BANK ARTEE Industries Limited - Proprietary & Confidential

  5. Ranked 115 amongst 144 countries (improved from 127 / 142) • Market size ranking – 33 • Improved rankings: • Macro Economic environment :: 39 from 121 • Labour market efficiency :: 55 from 70 Nigeria’s Global Competitiveness Data Source: WEF – GCR :: 2009 – 10, 2010 – 11, 2011 – 12; NESG Research ARTEE Industries Limited - Proprietary & Confidential

  6. Amongst the ‘Next – Eleven’ Nigeria ranks 9th. , ahead of Bangladesh & Pakistan • Amongst the BRINCS, Nigeria ranks 6th. Global Competitiveness :: Nigeria v/s Emerging Economies Data Source: WEF – GCR :: 2009 – 10, 2010 – 11, 2011 – 12; NESG Research ARTEE Industries Limited - Proprietary & Confidential

  7. Agriculture, Wholesale & Retail, Crude account for more than 70% of the GDP • Non-oil sectors like Telecommunication & Post (34%); Wholesale & Retail (11%), Hotels & Restaurants (12 %+), Real Estate (12%+), building & Construction (12%+) recorded double digit growth Sectoral contribution to GDP (2010 – 2011) Data Source: NBS Outlook – 2010 :: 2015 ARTEE Industries Limited - Proprietary & Confidential

  8. The slow down in growth in 2012 is a resultant effect of external shocks (slow down in US & Europe, China); lower output of crude production, subsidy removal on PMS and its effect on household incomes • Projected Real GDP growth are: • 2013 :: 8.04 % • 2014 :: 7.43 % • 2015 :: 7.25 % • Nominal GDP for 2012 – NGN 43,134.77 bn, a 15.63% growth over 2011 • Projected Nominal GDP growth rates are: • 2013 :: 17.28 % • 2014 :: 15.53 % • 2015 :: 14.19 % The future :: 2013 – 2015 Data Source: NBS Outlook – 2010 :: 2015 ARTEE Industries Limited - Proprietary & Confidential

  9. RETAILMENT – The future The BIG Impact ARTEE Industries Limited - Proprietary & Confidential

  10. The Evolution of RETAIL ARTEE Industries Limited - Proprietary & Confidential

  11. In developed economies; the composition of organised retail is much larger than the unorganised retail. Therefore; it would be safe to presume that ... Economic growth has a direct correlation to Increase in organised retail Percentage of Organized Retail: United States of America: 80% United Kingdom: 80% • Japan: 66% Australia: 78% India: 10% Nigeria: 3% The Organised Retail Industry – A macro overview ARTEE Industries Limited - Proprietary & Confidential

  12. 27% of the Global GDP is contributed by organised retail; 20% of the US economy is supported by retail • Across the globe; retail employs 17.1% of the workable population and in the US it accounts for 14% • Organised retail supports the development of various sectors across the economic environs of the country • Organised retail conserves foreign exchange The Organised Retail Industry – A macro overview Source: Retail Trends and Economic Dependencies – www.marc.org ARTEE Industries Limited - Proprietary & Confidential

  13. The BIG IMPACT of Retail ARTEE Industries Limited - Proprietary & Confidential

  14. Current estimated yield loss is around 39% - primarily due to an inefficient value chain & cold chain • Effecting a loss in earning and increase in cost • Organised retail would help improve the efficiencies of the value chain • Reduces wastage • Increase revenue • Effectively lowering down inflation rates RETAIL & AGRICULTURE ARTEE Industries Limited - Proprietary & Confidential

  15. Organised retail helps increase the presence of brands in all categories • Launching of new products & concepts to test markets leading to eventually setting up local manufacturing facilities • Manufacturing infrastructure improves as technology transfer is facilitated • Creates an improved platform for direct interaction with the consumers RETAIL & MANUFACTURING ARTEE Industries Limited - Proprietary & Confidential

  16. Organsied retail is the major impetus of realty developments • India case study: • 2001 – 142,000 m² of modern retail • 2006 – 2.7 million m² • From 30 malls in 2003 to 230 malls in 2007 • Organised retail has moved from mere shopping to ‘RETAILMENT’ RETAIL & REAL ESTATE ARTEE Industries Limited - Proprietary & Confidential

  17. Case Point 1 Increase in consumer finance Increase in organised retail Increase in consumer spend Case Point 2 Increase in capital investment Increase in project finance Increase in organised retail RETAIL & BANKING SME Finance through a Supply Chain Contract with major Retailers ARTEE Industries Limited - Proprietary & Confidential

  18. Technology is the backbone of organised retail • The boom in retail will give an impetus to the IT industry in sphere of both hardware and software development • Increase in telecom and IT infrastructure facilitates a cashless economy RETAIL & TECHNOLOGY ARTEE Industries Limited - Proprietary & Confidential

  19. Organsied retail helps develop the value chain in the system • Value Chain entities are SME drivers • Development of ancillary units RETAIL & SME ARTEE Industries Limited - Proprietary & Confidential

  20. Organised retail generates 17% of total employment globally • Organised retail develops entrepreneurship Franchise model employees become employers • Organised retail is by far one of the single largest employers in any economy • In developed economies, 30sqm is managed by one person RETAIL & HUMAN CAPITAL ARTEE Industries Limited - Proprietary & Confidential

  21. DUBAI :: • 2010 – 10 million tourist • 2015 – Estimated 15 million • 25% - 40% visitors to Mega malls are tourists • Average spend is 2 – 3 times higher than residents • Organised retail and tourism are interdependent • In Nigeria organised retail will develop domestic tourism RETAIL & TOURISM ARTEE Industries Limited - Proprietary & Confidential

  22. Organsied retail increases the revenue base for the government RETAIL & FEDERAL REVENUE ARTEE Industries Limited - Proprietary & Confidential

  23. RETAIL Industry Broad Market Sizing ARTEE Industries Limited - Proprietary & Confidential

  24. Nigeria – Consumption pattern • Figures in NGN billion • Source: NBS 2009/2010 Consumption Report ARTEE Industries Limited - Proprietary & Confidential

  25. Nigeria – FX Spend • Estimated figures based on secondary research – Source - FDCL ARTEE Industries Limited - Proprietary & Confidential

  26. South Africa – A retail comparison - I • SPAR SA – Handbook 2011 ARTEE Industries Limited - Proprietary & Confidential

  27. South Africa – A retail comparison - II ARTEE Industries Limited - Proprietary & Confidential

  28. The Challenges ARTEE Industries Limited - Proprietary & Confidential

  29. RETAIL … recognition as a ECONOMIC SECTOR • Infrastructure • Consistency • Human resource The Challenges ARTEE Industries Limited - Proprietary & Confidential

  30. ARTEE Industries Limited Credentials ARTEE Industries Limited - Proprietary & Confidential

  31. Genesis & Evolution - RETCO • Started in 1988 … one of the first organised supermarket in Nigeria … 250 m² ... branded as • 2011 – Nigeria’s largest Supermarket & Department Store with presence in Pan – Nigeria and in excess of 20,000 m² of retail space • Evolved as the most comprehensive supermarket and department stores in Nigeria ARTEE Industries Limited - Proprietary & Confidential

  32. Evolution – RETCO 2010 – SPAR Nigeria introduced ARTEE Industries Limited - Proprietary & Confidential

  33. Business interests ARTEE Industries Limited - Proprietary & Confidential

  34. MANCO Started in 1999; with over 6,000 m², CASCADE is one of the leading brands of Table Water in Nigeria 2006 – the largest & the most comprehensive furniture manufacturing facility in Nigeria spanning over 10,000 m² and over 85 CNC machines. This facility was commissioned within 11 months of starting the project from scratch ARTEE Industries Limited - Proprietary & Confidential

  35. PROPCO Developing one of the largest community type living residential complexes spanning over 23 hectares – 50 houses built within 12 months of start of work 2010 – Ultra modern shopping complex measuring over 6,000 m² completed with 14 months of start ARTEE Industries Limited - Proprietary & Confidential

  36. The opportunity is there for the taking But will only happen if we make it happen ARTEE Industries Limited - Proprietary & Confidential

  37. Thank you ARTEE Industries Limited - Proprietary & Confidential

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