Angola beyond the oil

Oil has helped Angola’s economy to boom, but the country is keen to diversify its economy and is therefore moving from importing manufactured goods to importing raw materials and machinery. Maersk Line’s service is helping small Angolan manufacturing companies, like hygienic products maker SICIE, receive the raw materials they need to make a successful business.

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SICIE chief Executive Officer Sameer Jaffer: “There are great opportunities for investors in Angola.” Photo: Thomas Sonne

Growth opportunities

  • Angola is the fifth largest economy in Africa and the third largest in Sub-Saharan Africa. It is the continent’s second largest oil producer after Nigeria. 
  • It is one of the fastest-growing economies globally, with an annual GDP growth averaging 10% since the end of the 27-year civil war in 2002, primarily due to its oil resources. 
  • During Angola’s oil production boom from 2002 to 2008, its gross domestic product grew by 15% per year on average, the fastest pace in Africa. Its GDP growth fell to 2.4% in 2009 due to the global financial crisis and the drop in oil prices. 
  • Economic growth here has recovered a bit since then, but has not reached previous levels. The GDP per capita increased by an average of 6.5% annually, from USD 3,413 in 2007 to USD 5,668 in 2013.

Source: World Bank

The compound bursts into life when the Maersk Line container arrives. Workers hurry to unload the paper rolls, which are essential to keeping the diapers, toilet rolls and serviettes rolling off the SICIE production lines.

From Viana, a densely populated district of Angola’s capital Luanda where the streets buzz with traffic and activity, SICIE’s Suave-branded products fan out across the country. The company employs some 1,500 people in its production lines and offices and is planning to expand to new ­premises to the north of the city.

Its business is built on reliable supply lines. Some 13 years after the end of its civil war, Angola’s economy is growing rapidly. However, it also remains highly dependent on oil and gas and still produces little of its own needs – so manufacturing companies like SICIE rely on imports to keep their businesses running.

Turnover has grown some 20 times since 2000, and Chief Executive Officer Sameer Jaffer expects an ­additional growth of 10% over the next three years.

“There is no downside to what has been happening in the last 12 to 14 years,” Jaffer says. “If I were to advise anyone on what it is like to set up a business in this country, I would say that things are getting easier, and it would be a great idea to do so.”

“The future looks like there’s lots of sunshine at the end of the road,” he adds.

A real change

The rapid development of Angola since the end of the year has left infrastructure and manufacturing still needing to catch up, says Claudio Marcos Rosa, Managing Director of Maersk Line in Angola. Around the sprawling and traffic-choked capital Luanda, the hulks of new buildings reach upwards and its pot-holed roads are in constant need of overhaul.

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The SICIE compound is a hub of activity, when the Maersk Line container brings raw materials.

Angola’s trade

  • Angola’s exports amounted to USD 68 billion in 2013, USD 67 billion of which were in the oil sector. Its imports were worth USD 26 billion.
  • At 20%, Hydraulic cement accounts for the biggest share of imports, followed by wheat flour, rice, sugar cane and meat.
Source: National Bank of Angola, Angolan Ministry of Transport

Maersk Line arrived in Angola before the end of the war, providing a link on its traditional main trade route to Portugal, which had colonised the country. It quickly expanded in step with the economy to provide ­connections to Brazil, the United States and China.

“That helped the country to develop its overseas trade, which we believe indirectly created more than 13,000 jobs over these years,” says Rosa.

Five years ago there were only two or three supermarkets in the country, he says. Now there are more than a hundred. Six years ago, the terminal was doing six moves an hour, and now it is at least 30.

“There’s a real change in the place today,” Rosa adds. “So we are moving from importing manufactured kinds of commodities, to raw materials and machinery in order to help the diversification of the economy in Angola.”

“Maersk Line’s role in this change is not to think, ‘We’re going to have less imports’. It’s not about that. I think that we need to support the customer who’s ­producing here.”

Like a multinational

SICIE, which is also the distributor for US personal care company Kimberly-Clark in Angola, has big plans. It is building a new paper mill to the north of Luanda, on land where it will have space to expand, with machines from Italy.

“We see companies like SICIE, that started off trading and moved into manufacturing, that have relied on ­Maersk for a long time to secure their supply chain,” says Dakalo Mboyi, country manager for Safmarine.

“But they’ve also not relied on short term pricing but rather on securing the business over the long term. That’s the kind of partnership that we seek to build up.”

Things have come a long way since Sameer Jaffer’s father arrived from the neighboring Democratic Republic of Congo in 1995. The production lines hum with activity, sending off products to the company’s 30 points of sale around Angola, and workers buzz around the compound to line up the raw materials.

“When I’m in my office and I see the Maersk containers pull up, it gives me a lot of pride to see that Maersk has supported us since the beginning,” Jaffer says.

“It makes me feel that I’m a multinational as well, and that makes me feel very comfortable at the end of the day.”

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