Positioned to compete

Angola

José Kuvingua, chairman of Port of Cabinda, talks to The Energy Year about challenges in increasing traffic and enhancing operational efficiency, as well as how the port aims to compete with regional facilities. Port of Cabinda is the principal port in Cabinda, where major developments including oil platforms, a free zone, a deepwater terminal and a refinery are underway.

What have been the biggest challenges faced by the Port of Cabinda to increase traffic and enhance operational efficiency?
Our greatest challenge has been that our operations are heavily dependent on the level of the tidal waves, which occur regularly here in the northern part of Angola. These waves can go as high as 2 metres and when they do, they can bring our activity to a complete halt. It is therefore often that vessels have to wait up to eight days to be able to dock at our port. This is a disadvantage that can easily make our clients turn to other ports, going to Pointe-Noire or Luanda instead of Cabinda.
In 2012, the government decided to make some small modifications to the port that led to the construction of a floating pier, which has been operational since. In 2016, another decision was made to construct a maritime passenger terminal and breakwater that protects the harbour in Cabinda from the force of the waves. A ramp will also be built to accommodate the ro-ro ferry boats that are already in Angola.
These developments will help mitigate the impact of the tidal waves, improve our cargo capacity and allow two big vessels to dock at the port at the same time. We hope that many of the vessels that decided to go to Pointe-Noire or Luanda for trans-shipping will return to Cabinda.
Another important improvement is the construction of the new deepwater terminal in Caio, which has been in progress since 2018. Construction work stopped for six to eight months due to the Covid-19 pandemic, but we are now fully focused on accelerating progress to complete this terminal by 2022.

In 2020, the government launched a project to build oil platforms in the Northern Cabinda Province. How important are initiatives like this for the development of the region’s industry?
This development, along with many others, will enhance growth not only in the region’s oil and gas industry, but in its economy as a whole. The government intends to make the country’s port facilities regional logistics platforms for trans-shipping African commodities. We are surrounded by very big countries such as the DRC, and the Port of Cabinda has the potential to become an important regional supplier to Angola’s landlocked neighbours. All of the developments and projects being carried out aim to reduce poverty and help the region’s socio-economic development.

How do you see Cabinda competing with other ports in the country and regionally going forward?
We will soon be well positioned to compete with the Pointe-Noire port, the principal port in Republic of Congo, which I expect to be our biggest competitor in the coming years. Once that happens, clients will have more options to pick from for trans-shipping in the region.
We are not afraid of competition; it makes us do things better. Upon the completion of the new deepwater terminal in Caio, Cabinda will be able to cater for all the demand in the region.
While we often compete with other ports in Angola, we also collaborate with them. Exchanging experts and know-how is an important part of that collaboration. However, whenever we have the chance to attract customers away from our competitors, we will certainly take it.
Angola is a large country; our existing ports are spread around our land area and separated from one another by long distances, so competition is not such an important matter. Every port can get a share of the pie.

What other plans do you have in place to achieve sustainable port development and enhance productivity going forward?
In parallel with the deepwater terminal in Caio, the government of Angola also plans on constructing Fútila Industrial Park, where the Cabinda Refinery will be located. This is a very important project for us; it will not only play a vital role in attracting foreign direct investment but will also provide fundamental incentives for the region’s economic development. It also means that we will soon have to be ready to cater for increasing demand.
Going forward, we must improve our road connections with our neighbouring countries, as well as the accessibility of our premises. Upgrading the surrounding infrastructure will be key to enhancing the port’s sustainability and increasing our profitability. We expect that parts of the free-trade zone will be completed by 2022, when the Caio deepwater terminal is slated to start operations.

How do you plan on attracting foreign direct investors into the province of Cabinda in the years to come?
We will have to improve our capacity and capabilities for informing investors about our new offerings. Sometimes it can be hard for investors to explore alternative opportunities and it is our responsibility to inform them about the new regulations and incentives and the port reception facilities that we have put in place to make their operations more profitable. I am confident about our offerings and convinced that all the new infrastructure developments in the province will have an important multiplier effect.
The Port of Cabinda will welcome any kind of investors, not only those involved in the oil and gas industry. Cabinda is the province in Angola that produces and exports the most wood to countries such as the United States, Spain and Portugal. We have put in place many sustainable forestry practices that can protect forests and encourage their regeneration. We also have vast mineral resources, including gold and phosphate.
There is no denying that oil and gas will remain the main driver for the province’s economic growth, but we must continue diversifying our offerings and capabilities. Our objective is to make every investor feel comfortable when coming to Cabinda and to provide the best possible conditions for them.
We hope to be able to finish the ongoing developments in and outside the port in the near future. That will also help reduce taxes and the high cost of living in the province. Earlier this year [2020], the government reduced the VAT rate applicable to the import and sales of goods from 14% to 2%. It was important to create a special VAT regime for the province as we have historically sold goods at higher prices than the rest of the country due to our geographical location and lack of equipment. Mitigating the impact of the VAT on the general population and companies that come to operate in the province is of utmost importance.

Read our latest insights on:

• Angola
• Republic of Congo