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04.02.2009 International

Credit crunch: Scangroup cuts back on expansion

By Reuters

Marketing firm Scangroup is easing back on acquiring new businesses across Africa, due to the uncertainty created by the global financial crisis, its chief executive has said.

Last year, Scangroup said it would set aside the bulk of the Sh1.3 billion ($16 million) it got from the sale of a 27.5 per cent stake to world's second largest advertising firm WPP for buyouts.

“Given the current international scenario, we are in no hurry to make acquisitions. We have been talking to several players in different countries, we will continue to talk,” Mr Bharat Thakrar told Reuters.

He said the company is considering entering Ghana and Mozambique through purchases of existing businesses.

“We will continue to find out other markets we would like to go into, but at the moment it is a question of evaluating,” said Thakrar.

Scangroup is looking to make the most of its tie-up with WPP to increase services, he said. “We have three of their brands already, like Grey, JWT, so the intention is to expand these brands into other countries, possibly get more of their brands.”

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WPP has wide experience in digital media, public relations, activation, field marketing, branding and identity and the two firms could start new businesses in Africa, he added.

“When the time is right, we will look into setting up joint ventures with some of their other companies in this part of the world to service East, Central and Southern Africa,” he said.

Scangroup has 12 firms operating in Kenya, Uganda and Tanzania. A move to the west through Nigeria last year was shelved due to high costs.

Source: Reuters