Utilities Industry: ATCO Power in South Africa

BU606 – Economics

Group 7
Amanda Downey - 125824690
Ahmed Youssef - 135819900
Alex Zorzitto - 135823380
Tom Vandemoortele - 135824330
Wafik Moussa - 135808970

Word Count = 2,832
(including titles and citations)

Contents 1.0 Executive Summary 3 2.0 Electrical Power Utilities Industry in South Africa 4
2.1 Why South Africa? 4
2.2 Environmental Analysis 4 2.2.1 Social Economic and Political Considerations 4 2.2.2 Macroeconomic Trends 5 2.2.3 Aspects of International Trade/Investment 5 2.2.4 Competition Analysis 6 2.2.5 Market Structure and Firm Entry 6 3.0 Opportunity, Issues and Recommended Strategy 7
3.1 Opportunity Description 7
3.2 ATCO Power Current Strategy: Strengths and Weaknesses 7
3.3 Risk Factors in South African Market 8
3.4 Financial Analysis 8
3.5 Recommended Strategy and Entry Mode 9 4.0 Implementation Plan 9
4.1 Immediate Action Plan: 6 Month 9
4.2 Short Term: 1 Year 10
4.3 Long Term 10
4.4 Contingency Plan 10 5.0 References 11 6.0 Exhibits 13

1.0 Executive Summary ATCO Power is yearning to achieve its global expansion goal and establish itself as an industry leading, reliable and environmentally responsible provider of cost-effective solutions for customers and partners worldwide. In search for an investment opportunity in the underserved market in Africa potential target countries were identified based on electricity demand growth trends, production capacity, economic growth and a multitude of political, financial, social and environmental factors. South Africa emerged as the most logical location for ATCO to proceed with an international venture. South African GDP is expected to continuously grow at an annual rate of 4.5% until 2030. This growth signals rising energy demands that cannot be satisfied using the existing power generation