Build Angola’s futureFebruary 16, 2018
Hélder Araújo, board member of Casais Group, talks to TOGY about the business climate in Angola, competition in the market and the investment potential of the country. Casais Group has been working in Angola since 1999, mainly in the construction sector.
On investment: “The investment in Angola was being carried out based on the high price of oil. With the decline of the oil price, the country’s revenues declined and the lack of foreign currency became a reality. This has direct implications for investment and in the construction sector.”
On outlook: “The last two years have been very difficult and the challenges have been many. But we believe that these years will pass and the good times will come back to the country again.”
On competition: “Our main competitors are the European companies. Portuguese companies are our toughest competitors because the labour, materials and the technology are very similar.”
Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our interview with Hélder Araújo below.
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Have you seen challenges in Angola over the past few years?
The last two years have been very difficult and the challenges have been many. But we believe that these years will pass and the good times will come back to the country again. We have to diversify and understand that if the oil price comes down, we are going to have a problem. We have to adapt ourselves. Things will change for the better, which is why we have invested and are committed to Angola. About 50% of our materials are local and we import about 50% of our equipment. The difficulties we have had involve currency to pay suppliers abroad. This is the main issue at this moment and we hope it will change very fast.
In years past, our turnover was about USD 300 million, but we understand that is impossible to maintain the same level. We have to slow down and adapt ourselves to the market. At the moment we are making USD 250 million. We had to keep our clients and look for new ones to diversify the typology of contracting.
Do you see the competition here for you as European companies or do you also compete with Chinese companies?
Nowadays the competition is worldwide. We realise that the level of competition between Chinese and European companies is different because the mentality and way of working is also different. However, we can say that our main competitors are the European companies. Portuguese companies are our toughest competitors because the labour, materials and the technology are very similar. Showing the difference and adding value are the most important things.
Was there a bubble in the construction sector in Angola that has now burst as a result of FDI and other investment?
The investment in Angola was being carried out based on the high price of oil. With the decline of the oil price, the country’s revenues declined and the lack of foreign currency became a reality. This has direct implications for investment and in the construction sector. The construction of buildings in the concrete structure phase is possible using local materials. But after, when the finishing works begin with the incorporation of equipment, it’s necessary to import, which is when it becomes a problem. The need to import, associated with the lack of foreign currency, has led to a suspension of contracts, so we have several buildings whose construction is temporarily suspended.
We can not forget, of course, that there was also a drop in demand from the unfavorable economic environment we have experienced. Therefore, I think it has been a combination of these two scenarios that led to a slowdown in real estate development. I believe that with the recovery of the economy there will be good opportunities in the real estate sector.
Are you trying to diversify and expand more into oil and gas?
Yes. We have a strategy and we have the capacity in terms of equipment, know-how and staff. We have a good team with great professionals and we are hoping for a good future in Angola. We believe we can do something more in the oil and gas sector. We are also diversifying our investments, not only in oil and gas but also in industries and farming. In the next 10 years, we will invest in these sectors, too. Currently 80% of our business is in Luanda, but we also have offices in Benguela and Huambo.
That is where we see the biggest opportunity for investments. Farming will be a very big area because we are increasing farming production across the country. We see huge opportunities to start producing locally to supply the local market and export. There are other industries where we see opportunities, some related to construction and some not.
There is also a scope for basic infrastructure such as roads, water supply and water treatment plants.
How do you support your clients in Angola?
That is our challenge every day. Flexibility and putting the focus on the client is fundamental. For us the most important thing is to understand the needs of our clients and their expectations. Then we need to put the whole team working together, demonstrating all their know-how to fulfil the expectations of the clients and build their vision.
With all the companies we have in our group, we can assist our clients and work together to find the best solutions, the most competitive and technological option within their budget. We like to interact with our clients and partners to build their vision.
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