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

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Having recently being invited into the BRIC economic grouping, South Africa has proven that Africa will provide the next wave of growth for the global economy. Waking up to this reality, MNC‟s are investing heavily into the „turn around‟ markets. In Angola SABMiller (Ahead of Portugal‟s Unicer) and Shoprite are the two notable success stories. Standard Bank‟s entry into the retail banking market in December 2010, has raised hopes for some of the other South African heavy weights, and Nedbank, Investec, ABSA are all queuing up to enter the US$ 45bn dollar banking sector. In the all-important oil sector there have been talks of a tie up between PetroSA and Sonangol to synergise in the construction of the 200 000 bpd Sonaref Lobito oil refinery project, estimated to cost in the region of US$ 8bn. Petro SA has plans of its own to build a 360 000 bpd, US$ 9bn crude refinery in Coega, Port Elizabeth, to help ensure security of supply of liquid fuels in the country. Project Mthombo, as it has been dubbed, will be one of the country‟s mega projects. In 2009 South Africa was Angola‟s fifth largest trading partner (overtaking Brazil) and total trade amounted to US$ 1.5bn, with a net trade surplus of US$ 448mn in Angola‟s favour. The continued opening up of Angola to South African trade makes sense and should gather momentum. Brazil: Leading the way As per their national motto Ordem e Progresso, Brazil is leading the way in Angola‟s reconstruction and has completed many of the largest infrastructural projects in Angola. Former president Luiz Inacio Lula da Silva laid a solid foundation reinforcing economic ties, and Dilma Rousseff, the incumbent, has received the baton already at full throttle. While she has yet to pay an official state visit, the Brazilian/Angolan alliance remains strong and continued transatlantic trade flows (currently in favour of Brazil) are guaranteed. The Brazilians have been one of the largest players active in the rehabilitation of Angola through their MNC Odebrecht which singlehandedly employed over 17 000 Angolan‟s, 14% of their total workforce in 2009. Angola is the largest recipient of Brazilian investment in Africa with dozens of companies operating in the country. Their influence is seemingly unlimited and they have been active in building roads, condominium estates, Electricity plants, Water purification plants, airport refurbishments and several other projects, too many to mention individually. One of their biggest projects at the moment is the US$2bn renewal of the bay of Luanda which includes a massive land reclamation, dredging and coastal expansion exercise. The biggest chunk of Brazilian investment in Angola has been directed to the petroleum industry with statecontrolled oil company Petrobras being one of the major players with equity states in several oil blocks. There has been speculation regarding the creation of a Super Oil company through the Lusophone triumvirate of Petrobras, GALP and Sonangol, which in 2010 had a combined turnover of US$ 81bn. Other notable relationships United Kingdom The United Kingdom‟s relationship with Angola has a bi-focal nature. The first priority is in the energy sector where BP dominates as one of the major NOC‟s in the country with equity in blocks 15, 17, 18 and 31 (Operator in blocks 18 and 31) and a 13.6% stake in the Sonagas LNG refinery. The second arm of interest is in banking, where Standard Chartered has significant exposure to Sonangol Finance Limited, having granted medium term facilities of over US$ 6.5bn. Standard Chartered has set up a representative office and are waiting for a banking license which will see them gaining further ground in Angola‟s significant trade finance flows. Making inroads into the aviation sector is LSE listed Lonrho, which has recently obtained a license to service Angola‟s underserved and lucrative domestic air routes, through its subsidiary, Fly 540. LonAgro, exclusive representative of John Deere of the US, has also opened up shop in the Bengo province, which is rapidly being developed as a new agricultural hub. France The Franco-Angolan, relationship is usually associated with the infamous Angolagate scandal that exposed shady dealings between French and Angolan government officials. Nicolas Sarkozy did his part to rekindle relationships when he embarked on a state visit in 2008 and since then the partnership has grown from strength to strength. The French remain very low key, however their participation in Angola‟s oil sector and, indeed, the gulf of Guinea, remains of significant importance. Total‟s oil production was 163kboe/d in 2010 and is growing. In the non-oil sector, Castel is a major shareholder in the brewing monopoly Cuca, which in this report, we value at in the region of US$2.4 bn. SABMiller‟s recent entry into the Angolan brewing space will pose a medium term threat to Cuca‟s dominance though. Also of interest is a US$1.5bn, three year loan which was advanced to Sonangol Finance by France‟s Calyon Bank in July 2009. 15
Italy Although Italy‟s oil interests are predominantly concentrated in North Africa (mostly Algeria, Egypt and Libya), through their six legged dog (ENI), they also have a notable paw print in West Africa where they have significant stakes in Mali, Nigeria and Congo. ENI‟s interests in Angola are sizeable in relation to other NOC‟s, with interests in Block 0 (9.8% interest), block 14 (20% interest) and block 15/06 (35% interest). In January 2011 ENI was awarded rights to explore and the operatorship of block 35, with a 30% interest. There has also been speculation regarding the acquisition of ENI‟s 33% stake in Portuguese NOC, GALP, by Sonangol. In his latest remarks on the subject, the Angolan oil Minister, Manuel Vicente expressed an interest in acquiring the parcel. This would make Sonangol the largest shareholder in GALP, increasing their stake to 48.33%. Table 5: Bilateral Credit Lines Credit Lines US$m Objective Date Germany 1,700 Rehabilitation of infrastructure Mar-09 Brazil 1,500 Purchase of Brazilian construction equipment 2008 Ex-Im Bank / China 1,000 Agriculture Jul-09 Portugal 1,000 Support for imports Canada 1,000 To facilitate bilateral trade Jun-09 Portugal 700 To fund public investment in infrastructure Jun-09 Spain 600 Construction 2008 Brazil 250 To fund new projects 2008 Spain 200 To fund new projects Ex-Im Bank / US 120 To support for imports Jun-09 UK 70 diversification of the economy Mar-09 Total $8,140 16
Page 1 and 2: Angola Imara African Country Cement
Page 3 and 4: Angola Country Map 11a 1 9a a 8 5 2
Page 5 and 6: Executive Summary Comeback post 201
Page 7 and 8: Table 1: Timeline for major policy
Page 9 and 10: Table 3: 2011 Budget and Q1 income/
Page 11 and 12: Constraints to the growth story Ang
Page 13 and 14: US$ Millions US$ per barrel over 10
Page 15: Chevron also holds a 38.1% interest
Page 19 and 20: SONANGOL: Angola’s de facto Sover
Page 21 and 22: Oil Majors in Angola´s Petroleum S
Page 23 and 24: In January 2011, Eni was awarded ri
Page 25 and 26: BAI BFA BESA BPC Banco BIC BESA Ban
Page 27 and 28: Table 9: Regional Banking Comparati
Page 29 and 30: Arguments for and against the devel
Page 31 and 32: Orascom Mobinil TNM Safaricom Econe
Page 33 and 34: Telephonic listings of Angola (ELTA
Page 35 and 36: Millions of Hectolitres NB Delta Cu
Page 37 and 38: Hotels, Tourism and Construction Ov
Page 39 and 40: • Kinaxixi Shopping Center and Of
Page 41: Capital Securities Botswana Ground

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

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