2 Angola The Business Opportunity You Never Knew About João Caiado Guerreiro
3 The present powerpoint presentation was drafted considering, amongst others, the following sources*: CIA World Factbook;U.S. Department of State;Diário Económico;Reuters News Corporation;Africa Energy Intelligence;Energy Information Administration – Official Energy Statistics of the U.S. Government.*Please note that due to the fact that Angola is a third world country the datacontained herewith varies from source to source.
4 ECONOMIC AND FINANCIAL CRISIS, PERIOD OF RECESSION THE WORLDECONOMIC AND FINANCIAL CRISIS,PERIOD OF RECESSIONANGOLAHIGH LEVELS OF GROWTH
5 ANGOLA INTERESTING FACTS: ANGOLA IS 5 TIMES THE SIZE OF THE UNITED KINGDOM AND OVER TWICE THE SIZE OF FRANCE
6 Population – 17,500,000 Capital – Luanda Area – 1,246,700 sq km Language – PortugueseCurrency – KwanzaGDP – 84 billion USD *GDP per capita – 4,941 USD **U.S. Department of State
7 Angola has made remarkable progress since its nearly 30-year civil war came to an end with the signing of a peace agreement in April 2002.
8 FASTEST GROWING ECONOMY IN AFRICA BEFORE 2002CIVIL WARFASTEST GROWING ECONOMY IN AFRICAAFTER2002
9 FOURTH FASTEST GROWING ECONOMY IN THE WORLD - an average GDP growth rate of 15% (2002-2008) YearGDP - real growth rateRank20039.00 %1020041.50 %156200511.70 %8200619.90 %2200715.00 %4200816.70 %
10 OIL PRODUCTION1,8892,9482,100Million barrels per day
11 WHY ANGOLA? Angola is now a peaceful country; strategic geographic location;macroeconomic stability;inflation in single digits;growing international currency reserves;per capita income is now approaching that of middle income countries – 4,941 USD;it used to be a marxist country, whereas now the Government is promoting free enterprise, trade and investment.
12 POLITICAL STABILITYFREE DEMOCRATIC ELECTIONS - 5th of September of 2008 (MPLA won with 81,64%).EXPECTED PRESIDENTIAL ELECTIONS IN having the same President since 1979.
13 PORTUGAL IS THE PRIVILEGED PLATFORM FOR ACCESS TO ANGOLA historical and cultural proximity (Angola was a Portuguese colony up until 1975);Portuguese speaking country;easy access from Lisbon which has 3/4 daily flights to Luanda;Angolan law is inspired by Portuguese law (same civil code; corporate code, etc.).
14 42 CONVENTIONS AND TREATIES BETWEEN PORTUGAL AND ANGOLA Bilateral Investment Treatyprovides incentives, as well as additional protection to investors from both countries.Agreement on Enforcement of Court Judgementspromotes the Judicial and Judiciary Cooperation between Portugal and Angola.
15 Customs Cooperation Agreement promotes the customs’ technical cooperation between Portugal and Angola.
16 ANGOLAN LAW Portuguese law as of 1975 = Same Civil Code; Similar Corporate Code;The only differences relate mainly to details, except for Oil Law.
17 WHY INVEST IN ANGOLA?Government is committed to progress and investment:political stabilityestablishment of a legal regime of incentives;economic and political reforms;free-market economy principles;offers credible legal protection and stability to investments.Democratic legislative elections in September 2008Presidential elections expected in 2009
18 Incentives Eligibility criteria The tax and customs incentives, exemptions or reductions shall be granted in accordance with the following criteria:Sector of activityDevelopment zone Special economic area
19 Sectors of Activity agro-forestry/cattle; manufacturing; fishing; construction;health and education;roadway, railway, port, airport, telecommunications, energy and water infrastructures.
20 Development ZonesZone A - Province of Luanda, as well as the main municipalities of the provinces of Benguela, Huíla and Cabinda.Zone B - Remaining municipalities of the provinces of Benguela, Cabinda and Huíla and provinces of Kwanza Sul, Bengo, Uíge, Kwanza Norte, Lunda Norte, Lunda Sul and Zaire.Zone C - Provinces of Huambo, Bié, Moxico, Kuando-Kubango, Cunene, Namibe and Malange.
21 Special Economic Zones These areas are defined by the government on a project need basis.
22 Angola is one of the most difficult, yet most rewarding countries to do business in…
23 SPECIFIC OPPORTUNITIES IN 5 KEY SECTORS: 1. Energy & Renewable Energy2. Housing and Infra-Structures3. Agriculture4. Mining5. Manufacturing
27 ANGOLA was in 2008 the biggest oil producer in Africa. The control of the oil sector is secured by a State-owned group - SONANGOL.ANGOLA was in 2008 the biggest oil producer in Africa.
28 OTHER INTERESTING FACTS REGARDING OIL PRODUCTION IN ANGOLA: Proven oil reserves of 9.0 billion barrels as of January 2008;Oil production expected to reach 2,8 million bpd by 2012;In the oil sector Angola always hits its growth targets, because it always respects its contracts;Sonangol works together with ExxonMobil, Chevron, Shell, BP, Petrobrás, Galp, Total, etc.Please note that according to recent news and following the oil prices’ reduction, Angola, as an OPEC member, will be forced to decrease its oil production to 1,55 million barrels per day.
30 SINOPEC SONAREF China’s state oil company; Entered the market offering two separate 1 billion USD signing bonus offers on two offshore blocks;Formed a partnership with Sonangol.SONAREFRefinery in the coastal city of Lobito with capacity for a production of 200,000 bbl/d;The project is worth 3.5 billion USD and is able to process heavy crudes;Sonangol is proceeding with the project and refining is to start in 2012.
31 NATURAL GASAngola is a world-class hydrocarbon region and its role is expected to increase in the future.
33 Regarding natural gas, there are currently some projects in Angola for its transport from the oil reservoirs located offshore into the international markets, starting as of 2012.
34 LIQUIFIED NATURAL GAS PROJECT Angola LNG Project is a joint venture between the following investors:SonangolChevronBPTotalENIHaving already invested US $ 4bn, in order to produce 5.2 million tones a year.
35 ANGOLA’S LNG PROJECT MISSION To develop a Liquefied Natural Gas plant in Soyo, Zaire Province, Republic of Angola, to export it to Atlantic Basin markets and provide natural gas for use in the Angolan domestic market.
36 THE DEVELOPMENT OF THE LNG PROJECT INCLUDES: the construction of an onshore liquefaction train with storage capacity of 360,000 cm for LNG, LPG (liquified petroleum gas) and condensate;a loading jetty for LNG tankers;the building of a pipeline to transport natural gas to Angolan markets.
37 TOTAL INVESTMENTAlthough the total project cost has not been released, Angola LNG Project has been considered as the "largest single investment ever made in Angola" by Angola’s minister of petroleum.Despite the aforementioned, it is estimated that such investment shall reach around 8 billion dollars.
38 ANGOLA IS SET TO EXEMPT COMPANIES EXPLORING FOR NATURAL GAS FROM PAYING TAXES On the 24th of March 2009 the Angolan Parliament voted as to allow the Government to implement a law that exempts gas firms in Angola from any tax burdens.
39 SONANGAS(subsidiary of state-owned oil company Sonangol)10-YEAR GAS EXPLORATION RIGHTSEni Angola Exploration BV, Gas Natural West Africa SL, Galp Exploration Petrolifera SA and Exem Energy BV
40 Opportunities for all types of companies in the Oil & Gas sector Involved are already the big players (ExxonMobil, Shell, BP, Eni, etc.) and their usual suppliers (Technip, Schlumberger, Halliburton, Bechtel).Nonetheless, there remain abundant opportunities for all types of suppliers, from Catering to Hotel andEngineering services!
41 RENEWABLESSOLAR POWERWIND POWERHYDROPOWERThe distribution of electricity in the country is not uniform due to a destroyed network, so Angola’s government decided to bet on renewable energies.
42 FIRST FORCE – BIODIESEL PROJECT First Force is a sound project in the field of crude vegetable oils for international biodiesel industry that is commited to contribute to Angola’s development.
43 PROJECT FUNDAMENTALSOff-take pre-ageements with leading biodiesel players;Investment of $200-$300 million;Privileged access to the European markets;Initial target production of 200,000 metric tons;Life-span of 25 years.
44 First Force in numbers: Angola 299,000 haTotalarableland670,000tonsCrushingcapacitybeans172,000Oil Production$ 210 MCapEx(cum. 3 years)Sales$ 171 M400,000OilseedMeal
45 There is a whole country to rebuild! 2. HOUSING AND INFRA-STRUCTURESThere is a whole country to rebuild!
46 END OF DEVASTATING 27-YEAR CIVIL WAR IN 2002: Angola’s government engaged in a considerable reconstruction of roads, railways, bridges, airports, schools, hospitals and residential housing.
47 In 2005 the Government began using a vast amount of credit from China (around 7 billion USD) to rebuild Angola’s public infrastructures, as well as for the investment in several other large-scale projects.Meanwhile, other countries such as Portugal (providing around 2 billion USD), Brazil and Germany also started financing Angola through huge credit lines worth several billions of dollars, in order to contribute to the country’s overall development.
48 GOVERNMENT SUPPORT PROGRAMMES: National construction programme1 million houses by 2012Ministry of Hotel and Tourism plans to build around50 new hotels before when Angola hosts the African Soccer tournament.
49 HOW WILL THE COMPANIES BE SELECTED? ONE MILLION HOUSES BY 2012Public-private partnerships for purposes of housing construction are being created.HOW WILL THE COMPANIES BE SELECTED?Via tendering procedure where the most advantageous tender will be chosen.
50 In this context, some contracts have already been awarded to local companies for the building of approximately houses.Consequently, there is an opportunity in what regards supplying some of these companies.
54 PORTS AND AIRPORTSIn what regards this matter there is still a lot to be done…BuildingRepairMaintenance
55 Shipbuilding and repair industry PORTSShipbuilding and repair industryCabindaLobitoLuandaNamibeMalongoTrade developmentJob creation
56 AIRPORTS TOTAL – 211 With Paved Runways – 30 With Unpaved Runways
57 FOREIGN WORKERS IN ANGOLA Any foreign worker in Angola needs to hold a working visa. To obtain this visa, the worker has to comply with the following requirements:hold a passport valid for more than 6 months;have an adequate visa;have at least USD 200 for each day in Angola, and accommodation;have an international vaccination certificate;and not being prohibited from entering the country.
58 3. AGRICULTUREAngola has launched an ambitious plan to exploit both its fertile soils and high global food prices to attract investments in agriculture over the next four years.Of its 57.4 million ha of arable land, only million ha are being used.
59 Extensive river system Varied environmentArable landsHuge water reservesPotential for production of tropical andsubtropical crops
60 ANGOLA’S MAIN AGRICULTURAL PRODUCTS: CoffeeSugarcaneCottonSisalCornManiocTobaccoBananas
61 GOVERNMENT SUPPORT PROGRAMMES: Medium-Term Development Programme for of the Ministry of Agriculture and Rural Development (Minader)More than 400 million USD.Financing of small and medium producers, as well as associations and cooperatives who operate in this sectorCredit line of 350 million USD.
62 High-quality coffee production Credit line of 280 million USDCreation of 14 agro-forestry research centersCredit line of 7, 3 million USD
63 DEVELOPMENT PLAN FOR AGRICULTURE Public funds in the amount of million USD;Creation of 78,000 work posts;Increase on the cereal production which shall reach 385 thousand tons within the next three years;Construction of 55,000 houses in the rural areas together with 127 new schools, 127 medical centers, 71 rural markets, as well as 130 convenience stores.
64 4. MININGAngola is a resource of top quality gemstones and Luanda’s region is one of the most important and prosperous diamond producing areas in the world.
65 According to recent studies it is estimated that the Angolan subsoil contains 35 of the 45 most important minerals traded in the world. The country’s diamond production in 2007 reached approximately 9.7 million carats.
66 5. MANUFACTURINGThe Angolan Government is set to relaunch the manufacturing industry in the country during the period of 2009/2012.
67 increase of value of natural resources; REQUIREMENTS:increase of value of natural resources;rehabilitation of the industrial park;promotion of complementarity of the industrial structure.MODERN INDUSTRIAL SEGMENTUPDATED TECHNOLOGYINTERNATIONAL COMPETITIVENESS
68 EXPECTED DEVELOPMENT IN THE MANUFACTURING SECTOR (albeit from a very low base) GROWTH31,9%35,0%36,9%201020112012
69 MAIN INDUSTRIES TO BE DEVELOPED IN THE MANUFACTURING SECTOR: Machines and equipment, tools and accessories;Textile and footwear;Timber;Cellulose and paper pulp;Building materials;Petrochemical;Ships construction, repair and maintenance.
70 HOW TO INCORPORATE A COMPANY (main steps) : Define corporate name / activityArticles of Association by public deedCommercial Corporation Registry
71 Declaration of start of activity Social SecurityCommercial License
72 ANGOLA,The opportunity you will not want to lose and which Franco Caiado Guerreiro & Associados will help you explore…