Imara African Cement Report Africa, the last cement frontier Angola ...

Chevron also holds a 38.1% interest in a proposed pipeline designed to transport up to 250 million cubic feet
per day of natural gas from Angola's Blocks 0 and 14 to the Angola LNG plant in Soyo. The development plans
include 87 miles (140 km) of pipeline routed under the Congo River canyon. Project construction is scheduled
to begin in the second half of 2011 and be completed in 2013. As at the end of F Y2010, Chevron had invested
US$ 2.5bn in the Sonagas LNG project. The commencement of gas production in 2012 will introduce a
significant new flow to Angola‟s revenue stream and will likely see the US overtaking China in terms of total
trade.
The preponderant focus for US investment has been on the oil sector, and while there is significant interest
from non-oil US companies to invest in Angola, the task has been rather uphill. In 2009 the US Ex-Im bank
availed a US$ 120m credit facility for Angolan companies looking to import mechanical agricultural equipment
from American companies. The facility remains unused due to the overly stringent requirements needed to
access the facility. Other bumps that have strained the US/Angola relationship in recent times included HSBC‟s
American subsidiary closing all the Angolan government‟s bank accounts due to alleged money laundering
activities by high profile public officers.
Some of the bigger names that have made their mark in the Angolan market include Baker Hughes (Oil and
Gas), Cameron (Oil services), Coca Cola (through the Kenya hub), Chevron (Oil and Gas), Cobalt International
Energy, and General Electric (Oil and Gas division). Cummins and John Deere have recently opened subsidiary
offices to take advantage of the next wave of growth, doing away with their previous agency relationships.
India: Spicing up the Indo-Angolan relationship
India‟s exports to and investments in Angola have shown perceptible increase after cessation of the civil war in
2002. Bilateral trade between the two countries which, was only a few million dollars five years ago reached
US$450m in 2007 and US$1.8bn in 2009. The principal export items to Angola include tractors, vehicles,
agricultural machinery and implements, pharmaceuticals and cosmetics, tea, Basmati rice, food, spirits and
beverages, finished leather, paper and wood products and petroleum products. India‟s main import from
Angola is crude oil and in FY2009 the state-run oil refiner, Indian Oil Corporation (IOC) purchased an average of
63,000 bpd from Angola, compared to about 30,000 bpd in FY2008.
While Indian companies such as Tata, Mahindra & Mahindra and others have had business interests in Angola for
some years, the Indian community in Angola is still relatively small, numbering some 1 000. As part of India‟s
oil diplomacy, in August 2004 its Export Ministry extended a US$ 40m loan to the Angolan government for the
Moçamedes Railway (CFM) Rehabilitation Project. Rail India Technical and Economic Consultancy Services
(RITES, an Indian government enterprise) started the project in 2005 and handed it over at completion in
August 2007. India‟s EximBank then extended three credit lines of US$5m, US$10m and US$13m for agricultural
equipment and Indian tractors. The State Bank of India (SBI), which opened offices in Luanda in 2005, has
subsequently also extended commercial lines of credit for more tractors and the importation of capital
equipment from India. Another term loan of US$10.8m has been approved by SBI and the GOI has recently
approved US$30m for setting up an Industrial park and US$ 15m for setting up a cotton ginning and spinning
plant. These increased efforts are petty cash in comparison to the multi-billion dollar loans extended by
China‟s EximBank during the same period and to date, India has been excluded from all oil extraction
activities.
India‟s diamond diplomacy seems more successful though and the Angolan state diamond company, Endiama,
has agreed to do business directly with the large Indian diamond industry, while India is looking at opening an
institute for jewelry manufacturing in Luanda.
South Africa: SA’s rainbow find’s a new end in Angola
A meeting of like minds has seen Presidents Jacob Zuma and Eduardo Dos Santos usher in a new era that, like
the Chinese one, is pragmatic and mutually beneficial. On the one hand the Angolans are cognisant that South
Africa‟s indusrialised economy could offer much in the way of skills transfer, raw materials as well as financial
muscle to bankroll their redevelopment. For South Africa, a shift in the trade balance would create a massive
new market, creating an opportunity for their underutilized industrial capacity. Through SADC and bi-laterally,
the two economic giants are now working closer and having China as a mutual ally and trading partner is
similarly facilitating cross pollination.
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