2006 BUSINESS SYMPOSIUM
 
  Hotel Tropico, Luanda

 October 5, 2006


 Symposium Agenda

INTRODUCTION:

The US-Angola Chamber of Commerce and the Angola Chamber of Commerce and Industry organized their second Business Symposium in Luanda, October 5. The number of companies and organizations participating in the symposium was almost double of last year’s attendance. The companies and organizations are listed in this report.


SPONSORS:

The Trade Mission and Business Symposium could not have been held without the generous support of member companies. The three major underwriters included ExxonMobil (Esso-Angola), Chevron, and BP. Event sponsors were BAI, BESA, BPC, MITC, Prodiaman, Grupo Valentim Amões, and ValleySoft. Each of the underwriters made welcoming remarks at the opening of the Business Symposium.


OPENING ADDRESS:

The Minister, Deputy to the Prime Minister, Aguinaldo Jaime, opened the Business Symposium on behalf of the Government of Angola. The Minister provided a cogent overview of developments in the economic sector and the progress that had been made in promoting macroeconomic stability by imposing fiscal discipline and controlling inflation. His message was clear. Angola was on the right path, though many challenges still needed to be addressed.


PANEL DISCUSSION ON THE CHANGING INVESTMENT CLIMATE:

Paul Sousa (KPMG) moderated this panel and presented an introductory overview of the investment climate. Alex Pegado (Alexandre Pegado Law Firm) described developments in the judicial system since independence and emphasized the importance of an independent judiciary for establishing the rule of law and fostering a good business climate. He noted a number of improvements in the legal system, including establishing a system for voluntary arbitration of business disputes that cut costs and time spent in resolving these cases. Areas that still needed to be addressed were also listed. (Presentation 1)

Zeya Uddin (The Coca Cola Company) traced the history and growth of Coca Cola’s operations in Angola. This enterprise was not only profitable but had also created a large number of employment opportunities for Angolans at the bottling plants and in the distribution system. Three bottling plants are now in operation – Bom Jesus, Lubango, and Huambo, but he noted that even with increased output it is still difficult to keep up with the demand. (The Trade Mission visited the Huambo bottling plant the next day and was informed of plans to install new equipment to increase the capacity of the plant. The operation was efficient and well maintained.) Uddin also outlined the activities and projects of Coca Cola’s social fund established in 1999. (Presentation 2)

Luis Lelis (BAI) described the proliferation of banks in Angola’s financial sector. At the end of 2005, 12 banks were operating. Net external assets had almost doubled and cash on hand had substantially increased reflecting greater public confidence in the banking system. Later in the program, Lelis clarified one point he had made in response to the question of whether all the banks were in fact credible. In his slide presentation, he had said that he preferred not to comment on this point, which had been wrongly construed to indicate that not all of the banks were financially sound. Lelis said that all of the banks had been thoroughly vetted by the appropriate authorities before being licensed to operate and wanted this point to be quite clear. He added that the proliferation of banks had made the banking system more competitive. (Presentation 3)

The Vice Minister of Commerce, Cruz Neto, described the steps that the government had been taking to improve the business climate. The adoption of the new private investment code and the establishment of the one stop window (Guichet Unico) were important steps in that direction. At the same time, Neto commented that it is important to be critical of one is to make progress. The number of rules and regulations governing commercial transactions had to be simplified if the cost and time in establishing business operations in Angola were to improve.


PANEL DISCUSSION ON ESTABLISHING PARTNERSHIPS:

Filippo Nardin (Citizens Energy) moderated this panel. He noted that he had been involved in establishing the Catholic University of Angola, which had initiated a number of successful public-private partnerships. Whereas before, there was only one university, now five universities were operating in Angola, which had improved standards and level of education available to young Angolans.

Chindalena Lourenco (Fatima Freitas Advogados) provided a detailed exposition of the legal framework governing partnership arrangements in Angola. The arrangements included incorporated partnerships and unincorporated joint ventures. She also addressed the regulatory environment dealing with local content issues, including the different regimes of local content for the oil industry. (Presentation 4)

Frank van Esche (MITC and Pegasus) described the evolution of the partnership arrangement involving Pegasus, MITC, and a local partner with the objective of transporting fuel, refurbishing fuel storage depots, and establishing gas stations in the Lunda provinces. Each partner brought something to the table and commercial operations had started in October 2006. Major challenges were the slow legal process in getting Pegasus Angola registered and obtaining a fuel license from the Ministry of Petroleum. (Presentation 5)

John Lindley (BP) described the evolution of the Supplier Training Initiative that has the objective of building the capacity of local small and medium enterprises to meet the needs of the oil industry. Along with other oil partners, a Business Support Center has been established in Luanda where seminars are conducted for local Angolan companies. Lindley noted that a number of contracts have already been awarded as a result of this initiative. He concluded that the Supplier Training Initiative has made a promising start but the task ahead was big and would require other initiatives to meet the challenge of fully optimizing the use of local companies in the oil industry. (Presentation 6)

Dennis Flemming (Chevron) provided an overview of the Angola Partnership Initiative funded by Chevron at a level of $25 million over five years. Along with other donors, Chevron had contracted Pro Credit Holdings to develop a strategy for a micro finance bank based upon the successful model applied in 18 countries. Stefan Wolf (Novo Banco) described the subsequent startup of Novo Banco in 2004. Since its establishment, the bank has opened three branches, two in Luanda and one in Benguela, and now has 19,000 clients and $2 million in outstanding loans. Based on its success to date, Wolf predicted a further expansion of the bank in the future and listed some benchmarks to be met. (Presentation 7)


LUNCH SPEAKER:

The Minister of Industry, Joaquim David, was the guest of honor at the Business Symposium lunch. The Minister pointed out that three industrial zones had been established in Cabinda, Viana, and Catumbela to promote growth in the industrial sector. Other incentives to stimulate industrial investments were the designation of the investment zones, which provide tax and other advantages for potential investors. Exports outside of the oil sector would receive a boost when the SADC’s goal of a free trade zone within the region was established. The African Growth and Opportunity Act (AGOA) offered another avenue to promote exports. David also mentioned how one company that had come to Angola on a previous Trade Mission organized by the Chamber was now involved in the rehabilitation of the sugar factory at Dombe Grande in Benguela province.


PANEL DISCUSSION ON THE VIEW FROM THE PROVINCES:

Filippo Nardin (Citizens Energy) moderated the panel. Michael Finley (Africare) drew upon a recent trip to Bie province in the Central Highlands to describe how an intervention at the communal level can dramatically change the quality of life of local farmers. Specifically, by providing oxen to the village on a cooperative basis, more land can be cultivated, which has a multiplier effect on all aspects of life and living conditions of the local population. Africare brought 300 oxen to Bie under this program.

Hap Palmer (Pegasus) described the chronology and challenges his company faced in establishing downstream operations in the diamond mining areas of the Lundas. The transport of fuel by truck over poor roads, which often become impassable during the rainy season, is a major challenge. Pilfering of the fuel is another. Pegasus is planning to rehabilitate a fuel storage facility that can provide a reserve during the rainy season. Palmer also spoke about his company’s plan to rehabilitate a gas station in the Lundas, which will sell items needed by the local population. The first gas station is scheduled to open in early 2007 under the Vuma flagship name. The presentation included photographs of the region. (Presentation 8)

Karen Draper (S&N Pump) described how her company, headquartered in Houston, had decided to establish a facility in Cabinda for sea water pumping equipment for the offshore industry. Starting with just an idea, the facility, located in Cabinda’s industrial zone, now occupies 12 acres of land with office space, workshop and storage areas. The company has outsourced certain services and supplies to local Angolan companies, which has created new jobs and has had a multiplier effect on the economy. In addition to supporting oil companies operating in Angola, S&N Pump had recently exported products to neighboring countries. She encouraged investors to visit Cabinda and look at the investment opportunities there.

Simao Helena, Vice Governor of Zaire Province, provided an overview of the economy of Zaire Province. He spoke in particular about the impact that the LNG plant would have on the area around Soyo. New infrastructure will be required for the facility and new living accommodations would have to be built for the work force. The Vice Governor believed that the development of the LNG facility in Soyo would give a tremendous boost to the local economy.