SUPPLEMENTPROJECT CARGO AFRICA€¦ · 96 March/April 2020 Many fundamental growth indicators across Africa are positive. But political instability in various countries means that

SUPPLEMENTPROJECT CARGO AFRICA

Africa remains, undoubtedly, a landof unbridled opportunity. Thecontinent’s growth has stabilised at3.4 percent in 2019 and is expectedto pick up to 3.9 percent in 2020

and 4.1 percent in 2021, according to theAfrican Development Bank (AfDB).

This growth is below historical highs,which is due partly to the modest expansionof the continent’s ‘big five’ markets –Algeria, Egypt, Morocco, Nigeria, and SouthAfrica – which jointly grew at an average rateof 3.1 percent. The AfDB added that Africa’s

Commodity and oil prices have remainedrelatively stable, the latter trading at aboveUSD60 per barrel, until the recent outbreakof the Covid-19 coronavirus and subsequentdecline in oil prices. Overall, the terms oftrade for both energy and non-energyexporters in Africa have been strengtheningsince 2016, said AfDB.

Many fundamental growth indicators arepositive. There is a gradual shift from privateconsumption towards investment andexports. For the first time in ten years,investment accounted for more than half the

moderate growth reflects an increasinglydifficult external environment. Global tradegrowth slowed from an annual rate of5.7 percent in 2017 to 1.1 percent in 2019.

Metals and food, two of Africa’s majorexport commodities, have been mostaffected by this slowdown. Furthermore, theglobal industrial production index continuedto show signs of weakness in the first threequarters of 2019, which can be explained,partly, by the slowdowns in China andEurope, as well as tensions between theUSA and China.

A continent with pockets of

great promise

March/April 2020 www.heavyliftpfi.com96

Many fundamental growth indicators across Africa are positive. But political instabilityin various countries means that development is far from uniform; rather this is ayouthful continent with rapidly emerging areas of opportunity, writes Megan Ramsay.


continent’s growth. Furthermore, Africa is a‘young’ continent with the median age of its1.34 billion citizens being just 19.7 years old(compared with 41.7 years in Europe).These citizens demand employment andimproved living standards.

African governments will need to investand foster private investment to buildinfrastructure to enable that growth, whiledeveloping the appropriate skills in theirexpanding populations. The basicinfrastructure required includes reliablepower supply, transport infrastructure andpostal address systems, along with digitalinfrastructure, such as high-speed Internet,mobile networks and interoperable systems.

Appetite for riskStability is crucial to achieving these ends. Asimple truth is that African countries haveoften fallen foul of corrupt politicalpractices, and even the most stable of nationscan be thrown into disarray on the back ofan election result. Anti-government protests,armed conflict and terrorism are on the rise.Long-term planning – essential forexecuting major capital projects – is difficultand requires an appetite for risk.

As a result, growth in Africa is notuniform; rather it manifests itself as rapidlyemerging pockets of promise. Still, Africa’s

Turkana area in Kenya,” Petit said. “We are seeing requests coming up again

in Ivory Coast, Namibia and South Africa, sothat is encouraging. In Benin there is theCNPC pipeline project; in Ethiopia, windfarms are being developed; and in Cameroon,there will be hydro projects. But we expect2020 will be mostly an oil and gas year.”

In the mining sector, gold trading hasmaintained the momentum and interest ofcompanies, despite security tensions in Mali,Nigeria and Burkina Faso.

“The challenge for mining companies –and for us as service providers – in 2020 willbe how we continue to serve thesecompanies in these areas and ensure thesafety of goods, staff and contractors,” Petitsaid. “That will be one of the key challengesthat will surface this year.”

Volatile ratesThe copper and cobalt belt around Zambiaremains active – but there are risks. Themarket rate for these commodities is volatileand demand unsteady. The drop in subsidiesfor electric cars in China is one factor havinga negative impact on cobalt consumption,for instance.

There are new mine projects in IvoryCoast and Burkina Faso, while inMadagascar mining activity is also growing.There are also big expectations for potashmining in Eritrea; if the politicalenvironment there improves, that has bigpotential, Petit said.

Katanga, meanwhile, is becoming “amulti-corridor area”, Petit said. Traditionallylinked with Durban, it now has a railconnection with Dar-es-Salaam, with Beiraand Lobito also coming up – and new minesare opening in the area, too

Petit observed: “There are also changes tothe mining code in Congo with regard toroyalties and local content, which may havean impact. We saw this in 2019 with somecustomers’ copper operations slowing downor stopping temporarily in 2019.”

Local content requirements are already areality for Bolloré – it has been present inmany African countries for decades, withover 99 percent of its 22,100 employees onthe continent being African. But now thelaws are shifting; there are stricter conditionsregarding the choice of subcontractors andthe linking of operating licences to ashareholding structure.

“It is a change at the level of the ownershipstructure of contractors,” Petit explained.“This could create new joint ventureopportunities for us with local partners as weevolve with the new environment.”

ACE 54 was launched at the Breakbulk

goal of realising economic prosperity willdepend on the specialised skills of theproject logistics supply chain.

According to Jérôme Petit, ceo Africa atBolloré Logistics, 2019 was a busy year onthe continent with oil and gas, and miningbeing its biggest drivers.

“There was more activity at the quotationphase, particularly when it comes to oil andgas in certain hot spots such as Senegal andMauritania,” he said. Examples include Totalwith a drilling campaign out of Dakar in2019, but also a new prospect involvingWoodside, BP and their related vendors.

“We still see Nigeria being a regularcontributor with the Train 7 award forBonny Island LNG, which will definitely beof great interest. The Gulf of Guinea –Gabon, Chad and Cameroon for instance –is also quite active in terms of oil and gas.”

In northern Africa, the oil and gasindustry accounts for a large proportion ofprojects in Algeria and Egypt, whileMorocco is a bright spot for wind energy.Libya looks set to boom in projects once theconflict there comes to an end andreconstruction begins.

Elsewhere, Mozambique is gearing upfor a bonanza of project activity in the LNGsector. Nigeria and Angola have hugeupstream business – although oil prices arenot what they were – and solar power isimportant in Southern African countries.

Plus: “We are looking seriously andwith great interest at what could happenagain with oil and gas production in theLake Albert area of Uganda and the

www.heavyliftpfi.com March/April 2020 97

We are looking seriously andwith great interest at whatcould happen again with oiland gas production in the LakeAlbert area of Uganda and theTurkana area in Kenya.

– Jérôme Petit, Bolloré Logistics

Bolloré moved 12oversize items from

the port of Kamsar toa mining site in

Guinea. The heaviestpiece weighed in at

220 tonnes.



Americas conference in October 2019.Headquartered in Dubai, it offers niche andmedium-sized project forwarders a way intothe African market

Philippe Somers, the company’s ceo,outlined: “Almost all of our services aredestination services. We act as an internalpricing desk and the client, the internationalproject forwarder, includes the destinationservices we provide in its bid.

“We cover all the verticals includingpower, mining, renewables, infrastructure,power and oil and gas. A freight forwardermight not have expertise across all of theseindustries, but we can select the best one ineach country in Africa for each enquiry.”

Somers described ACE 54’s concept asrepresenting “a major mindset change” forthe project forwarding industry in Africa.

He explained: “In project cargo, inparticular, the EPC contractors tend to wantone company to take care of everything, sohaving self-owned offices has been a priorityin Africa.

“However, in recent years, on many andmost occasions, a local player – notbelonging to a global operator – has provento be the better and more qualified option.The concept that ACE 54 offers is exactlythat and is based on the best-in-classdestination agent in the required segment.”

Local agentsThus, many international forwarders rely onpartners for projects in Africa. In such a casethe international project forwarder assumesthe risk, but uses local agents to carry out thework. Local content requirements are also afactor in this model, with many contractsbeing split between origin services and localservices – but ultimate responsibility for thetotal door-to-door services remains with theinternational project forwarder.

“There are only two global internationalforwarders with a network in Africa,covering maybe only 50 percent of the 54countries, and perhaps five companies withnot more than 15 offices across thecontinent. But they still may not all offerproject cargo services – so they must eitherwork with agents or stick with their ownedoffices,” Somers said.

The market response to the newcompany indicates that customers areinterested in taking advantage of a networkof compliant, vetted companies in Africa.

“Of course, the potential of US-basedinternational project forwarders ishumongous,” he said. “But theinternational forwarders’ decision-makers’headquarters are merely sitting in Europeand Asia. This market has been unreachable

down less dramatically and recover morequickly in Africa.

The African Continental Free Trade Area(AfCFTA) could be a big source of cargomovements for Bolloré. The proportion ofintra-Africa cargo it moves is tiny comparedwith other sectors (such as intra-Asia), soPetit sees huge opportunities.

However: “In terms of project cargomanufacturing, there will be only a fewcountries that will be able to benefit from theAfCFTA agreement. I believe South Africa,in particular, will be one of the big winners.

“Overall, though, in terms of cargomovement, AfCFTA will benefit othercountries – it will facilitate regular suppliesfor projects, mines, consumables and so on.We also expect to see new export marketsdeveloping, such as Egypt starting toproduce electrical goods and equipment.”

ExpansionBolloré is keen to make the most of suchdevelopments. It opened (with a partner) inSomalia in 2019 and was set to launch a jointventure in Ethiopia during February thisyear. It has also registered in Eritrea.

“Our objective and challenge is tocontinue linking our physical network ofassets in Africa with our freight forwardernetwork in order to provide an integratedlogistics solution to the EPC companies,particularly when it comes to the big LNGcontracts, because these will mobilise hugevolumes from multiple origins in a verylimited time,” Petit explained.

“For oil and gas EPC contracts, such asthe LNG projects in Mozambique andNigeria, it is about international flows ofcargo and a track record in arranging globalprojects – as we have been doing for manyyears for European, Chinese and in factmostly Japanese EPC companies.

“On the exploration and production side,in Mauritania, Ivory Coast, Senegal, Gabon

for some companies but now with ACE 54they can get into Africa.”

Somers has long experience of workingin the African market – something that isvital to success there. One of the challengesin doing business in Africa is that timelinesand deadlines can be somewhat elastic; thisdefinitely needs to change, Somers believes.

There is also a lack of equipment andassets, even in the countries with a higherlevel of project activity. In the case ofMozambique, for instance, this will requireurgent attention.

“Project activity is very fragmented inAfrica,” Somers observed. “There are not asmany local heroes that have all the expertiseand all the equipment, and bringing all ofthat in is a large cost for the EPC contractor.”

Other hurdles include the difficulty ofmoving complex pieces using inadequateinfrastructure in what can be a challengingclimate. There is not always enoughinvestment in the sort of roads and bridgesthat can cope with heavy shipments, Somerssaid, and the rainy season can haltconstruction work. Another example is thecyclone that devastated Mozambique in2019; the country is now trying to rebuildwith a view to accommodating large projects.

Somers pointed out that Africa’s miningindustry, like its oil and gas activity, has feltthe negative impact of global marketfluctuations less than other markets such asthe USA or Canada. Activity tends to slow

We cover all the verticals... Afreight forwarder might nothave expertise across all ofthese industries, but we canselect the best one in eachcountry for each enquiry.

– Philippe Somers, ACE 54

The AfricanContinental FreeTrade Area (AfCFTA)could be a big sourceof cargo movementsfor Bolloré.

ACE 54, A GAME CHANGER IN PROJECT MANAGEMENT TO AFRICA

ACE 54 provides pricing and technical solutions to the International Project Forwarder, selecting the best in class agents.

Our African network is the key asset to grow the company’s market share. Our desire to improve every day will convert challenges into BIG business opportunities. – Philippe Somers, CEO

Suite 1702, Level 17, Boulevard Plaza Tower 1 Sheikh Mohammed Bin Rashid BlvdDowntown Dubai, United Arab Emirates

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and Mozambique, we are investing in oursupply bases and equipment according toactivity. Physical assets and bases make adifference in the exploration and productionmarket,” Petit pointed out.

For mining, Bolloré is investing in itslocal presence and certifications in Ghana,Ivory Coast, Mali, Burkina Faso andelsewhere. In early 2020, its operations inGhana, Senegal and Burkina Faso were re-certified in compliance with theInternational Cyanide Management Code(ICMC). Recently, it invested in a cyanidestorage warehouse – also ICMC certified –and a packaging incinerator in Ghana.

“Overall, 2019 was a good year but it wasalso challenging in many cases because ofexternal factors such as security issues –which affected our customers and,consequently, our business – and severalelections,” Petit said.

Political changesThere will be more elections and politicalchanges in 2020 – such as those in IvoryCoast, Burkina Faso and Guinea.

“These changes can hamper business, asthey halt the economy or make investorsreluctant to move. We saw this last year inNorth Sudan, for instance,” Petit remarked.

While he expects 2020 to go smoothly, heis anticipating either a surge in short-termprojects before the elections, or a slowdown

this has an adverse effect when it comes todelivering project and heavy lift cargoessafely and efficiently.”

Another point is the development oftechnology infrastructure. Over the last tenyears, many African countries have movedaway from paper-based Customs systems andinvested in online and mobile banking, all ofwhich facilitates the movement of projectcargo through ports and across borders.

Belt and Road Initiative China’s Belt and Road Initiative (BRI) isalso making a contribution to Africa’sdevelopment. In Staples’ opinion: “Anyinitiative to improve Africa’s infrastructure iswelcome if it doesn’t come at the cost oflosing any country’s sovereign assets.

“In order to be sustainable, the initiativeneeds to benefit all stakeholders, betransparent, compliant and act responsiblytowards ensuring countries do notoverextend in terms of international debt,“he concluded.

Indeed, China has become increasinglyinvolved in African capital projects. It “isnow totally integrated in, andinterdependent with, the global economy”,according to a report from market analystEnerdata. The BRI is part of China’s drive tosecure trade routes – particularly maritime –on both an an import and export basis.

But it is more than simply a physical

as investors wait for the outcome of theelections. With such variation from countryto country and potential political changes onthe horizon, Petit said there is never a dullday in the African project cargo market.

“Mozambique is a good example,” hecontinued. “There is the question of roadaccess – many bridges have collapsed sothere is no road transport between Pembaand Palma.

“There are also security issues in thenorth, so shipping into the area will need aparticular set-up with security resourcesbringing extra costs.

“And the sheer size of the projects, andespecially the fact that probably theAnadarko and Exxon projects will happenmore or less in parallel rather than insequence, will require a huge amount ofmanpower, resources and equipment – all atthe same time.”

Danny Staples, corporate vice presidentglobal key account manager and corporatetendering for deugro, added: “Investment inquantity and quality of road infrastructurethroughout the continent could be improved,as could controls on truck overloading.

“Tanzania has introduced some of thestrictest overloading controls and penaltiesin order to preserve the existing roadinfrastructure. Overloading is one of themajor causes for road and bridgedeterioration (or even collapse) in Africa and


African energy demand is set to rise 60 percent by2040, and clean energy will be central in poweringAfrica’s growing economies.

According to deugro, approximately 28 percent ofthe projects it is tracking on the continent are classifiedas renewable energy.

“In terms of capital expenditure, the largest projectmarket for wind energy is Egypt, followed closely byDjibouti,” said Danny Staples, corporate vice president,global key account manager sales and corporatetendering at deugro.

“The most relevant markets at this stage fordeugro are Morocco and Tanzania, with a combinedvalue of over USD5 billion in current and futureprojects.”

Development hot spots for solar projects includeEgypt, Tunisia and Zimbabwe.

Bolloré is also seeing more activity in therenewable energy arena. Nicolas Dupart, Africa projectdirector, said the company saw a fair share of solarprojects during 2019. “These particular projects have a

shorter lifespan between early study and final delivery,which makes them attractive.”

He added: “We have been nominated for thetransportation of a hydropower turbine for the GrandEthiopian Renaissance Dam (GERD)... and we arecurrently bidding in the region, including for a windproject and at least three solar projects.”

Christian Hoffmann, head of marketing andcorporate communications at SAL Heavy Lift,recognised “a continuous development of secondhand

wind turbines being erected on African mainland”. He explained: “You might see projects where

developers can create a sustainable return on theirinvestment using these secondhand turbines and thiswill develop as a natural consequence of the re-powering of wind farms in Europe and in the USAover the coming years. When turbines at these windfarms reach 15-20 years old – which is not the end oftheir lifetime – we might see shipments of thesecargoes going to Africa.”

Gatheringmomentum

A tower segmentweighing 48.75

tonnes istranshipped from

ocean to roadtransportation.

deug

ro


infrastructure project. The initiative alsofacilitates the internationalisation of Chinesecompanies by supporting their participationin BRI projects abroad.

Plus, it acts as a tool of economicdiplomacy, enabling China to buildrelationships and alliances with the countriesthat sign up to be part of the BRI.

Most Asian countries and some Europeancountries are now part of the initiative, as aresome Latin American countries – and almostthe entire African continent.

In the context of China’s aims, Africa is aperfect fit for several reasons. For instance, itis rich in the natural resources that Chinaneeds, including oil and gas.

The continent’s need for infrastructuremakes the BRI an attractive proposition formany African countries, while thewidespread welcoming attitude tointernational investors – whether fromChina, the USA or elsewhere – helpsfacilitate foreign involvement in projects.

China is not a major direct investor inAfrica – rather, it provides loans and exportinsurance for projects, conditional upon theemployment of Chinese service providers(so-called ‘tied lending’).

The products of the projects it supportsare sold on the global market rather thannecessarily coming back to China – althoughthere have been cases of raw materials orinfrastructure being used as collateral againstloans to African countries.

Ultimately, Enerdata said that Africa is ofstrategic interest as an internationaldevelopment field for Chinese oil companiesseeking to become global players andcompete (in the future) with the biggestinternational oil majors. “The continentenables them to build up a diversifiedportfolio of reserves and develop theirmanagement and technological skills,” it said.

“Africa is also a significant market toproduce Chinese goods and services(particularly in infrastructure construction)”– and an important supply base for China’smilitary presence abroad.

Critics of the BRI suggest that it is a debttrap for countries that cannot afford todevelop critical infrastructure themselves.However, other studies have shown thatChinese-financed infrastructure projects inAfrica have had positive effects, resulting in amore equal distribution of economic activity.

HLPFI


There are not as many localheroes that have all theexpertise and all theequipment, and bringing allof that in is a large cost forthe EPC contractor.

– Philippe Somers, ACE 54

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An agreement signed between Ladoland Mammoet during January willallow the companies to targetcargoes for the 14 power plantprojects currently being developed

in Nigeria, as well as the technology,healthcare and agribusiness industries, saidLadol executive director Jade Jadesimi. Ladolwill also seek a greater share of the maritimerepairs market.

Nigeria has huge and growing need forcargoes across a variety of industries. A rangeof bans on imported goods intended tostimulate Nigerian production will meangreater equipment and infrastructure needs.Dangote Industries is building a newrefinery at Lekki near Lagos, due to becompleted by 2022. And the closure of the

island within the Apapa port. The whole ofLagos can be reached by water and Ladol’spersonnel travel to work by barge.

Jadesimi points to the need for Nigeria’sports to increase their competitiveness. Theyhave been losing the battle so far: in 2018,Apapa was overtaken as West Africa’s busiestcontainer port by Lomé in Togo.

The ability to barge cargoes for clients andkeep them off the roads is the “key valueadded” that Ladol offers, he said. Time spentin traffic jams is crucial for fast-movingexport goods.

Mammoet is supplying Ladol with itsheavy lift terminal crane, the MTC 15,which can lift up to 600 tonnes at a 25 mradius, as well as a 250-tonne capacitycrawler crane. Ladol said that the MTC 15is the biggest crane of its kind in the region.It will enable the lifting of large subsea cablereels, tanks, and smaller modules for rigsand generators.

Lack of appropriate equipment in portsis a major issue, said Femi Ademola, aconsultant commissioned by the LCCI fora report on Nigeria’s ports in 2018. Thechamber estimates that a 25 percentimprovement in Nigerian portperformance would translate into 2.1percent increase in GDP. It said that10,000 new jobs in the maritime portsector and 800,000 jobs in industry couldbe generated within two years if ports weremore efficient.

“The mechanisation of hithertomanually conducted operations will

country’s borders has forced ships thatwould have discharged Nigerian-boundgoods in Benin and Togo to head for Lagos.

The Nigerian government is forecast byKen Research to spend about 3.7 percent ofGDP per year on infrastructure to 2030 and3.1 percent of GDP between 2030 and 2040.

Road problemsYet the roads around the mainland ports ofApapa and Tin Can in Lagos are inadequatefor the numbers of trucks trying to use them.According to the Lagos Chamber ofCommerce and Industry (LCCI), journeysto ports in Lagos that should be possible tocomplete in an hour can take more than aweek due to traffic. Ladol, which has beenoperational since 2006, is situated on an

Breaking the jam at Nigerian ports


The World Bank has consistently ranked Nigeria’s ports asamong the least effective in the world. A strategicpartnership between Lagos Deep Offshore Logistics Base(Ladol) and transport engineering company Mammoetoffers a novel solution. David Whitehouse reports.

Mammoet is supplying Ladol with itsheavy lift terminal crane, the MTC 15,which can lift up to 600 tonnes at a 25

m radius, as well as a 250-tonnecapacity crawler crane.


definitely improve efficiency,” Ademola said.“The deployment of heavy liftingequipment by Ladol and Mammoet is a verygood development.”

Congestion on the roads is raising thelevels of uncertainty for charterers. SinceJanuary 27, the Nigeria Ports Authority hasbeen redirecting vessels waiting to berth inLagos to the eastern ports: Harcourt,Calabar, Onne and the Delta ports. Theseports have long been neglected, and theirefficiency lags behind that of ports in Togoand Benin. Neglect has also left them siltedand shallow: the eastern ports have berthdepth of between 6-11 m, compared with arange of 9-13.5 m in Lagos.

Lagos ports LCCI said in 2019 that the Lagos portscurrently account for over 80 percent of totalport volume and value in Nigeria, excludingcrude oil export. “There is need to urgentlyrestore full operation at the eastern ports,” itsaid. It makes sense for Nigeria to turn to itseastern ports. But charterers do not havetime to wait for them to get up to speed.There is little choice but to find new ways ofmoving goods and people in Lagos. Blocked roads have a domino effect on

the dangers of substandard tug boats andbarges that have shed their loads into thewaterways. This, it said, risks duplicating theproblems experienced on city roads.

The agreement with Ladol provides away for clients to “circumvent the lack ofreliability in terms of access to main ports,”said Harmen Tiddens, general manager WestAfrica at Mammoet. Tiddens does notexpect a quick solution to road congestionaround the ports: “we do not foresee thatsituation to get much better any time soon.”

ImprovementsAround Apapa, the roads remain“dilapidated” but the government has madeimprovements a high priority and the issuesare “resolvable”, Ladol’s Jadesimi said. Heexpects some improvement from a plannedofficial trailer park at Apapa with anelectronic call-up system for trucks.

Ladol offers a way to bypass the problem.The domino effect could even end upworking in the opposite direction. Ladol’squayside which can handle tugs, barges andocean-going vessels “should actually serve tosignificantly ease congestions on themainland,” Tiddens said.

HLPFI

conditions within ports. If trucks cannot getin, imports remain stuck, leaving no roomfor incoming vessels. For executives such asJohn Coumantaros, chairman of Flour Millsof Nigeria, the port roads are a hugestumbling block. His company in 2017 spentits own money to help repair the ApapaWharf road. “The roads are critical,” he said.“There is nothing that brings economicdevelopment faster.”

Ladol’s agreement with Mammoethighlights the potential of the country’swaterways. According to Nigeria’s NationalInland Waterways Authority (NIWA),Nigeria has about 10,000 km of waterwaysthat, if developed through dredging andinfrastructure provision, would allow year-round transportation of cargoes.

However, the authority has pointed to


Nigeria has about 10,000 kmof waterways that, ifdeveloped through dredgingand infrastructure provision,would allow year-roundtransportation of cargoes.


developed its presence in several marketsacross Africa

The core of its South African business isbased around the mining industry withstrong relationships to EPC’s owners andmining houses. Together with its clientsdeugro executes projects and projectshipments all over the continent and hasdelivered projects into Mozambique,Tanzania, DRC, Gabon, Ghana and SierraLeone, noted Danny Staples, corporate vicepresident, global key account manager salesand corporate tendering at deugro.

Staples expects the mining industry tocontinue to grow steadily in the years tocome. “The power and renewables sector inAfrica are also a driver for both greenfield andbrownfield projects. This is due to increaseddemand through population growth,industrialisation and the need to replacedamaged equipment or the need to upgradeold and failing infrastructure,” he added.

Most significant driver However, the most significant driver for thecompany’s services now comes from the oiland gas project market. For instance:“Currently deugro Hanau is executing alogistics scope for Mozambique’s CoralSouth FLNG project,” Staples revealed.

“In addition, long-awaited finalinvestment decisions on major or megaprojects have been made and led to anintense amount of tendering activity fordeugro in all our Africa locations, and weexpect this drive to continue for at least thenext five years. We estimate capitalexpenditure on current and future oil andgas projects to exceed USD640 billion.”

Mozambique is one example. The powermarket is experiencing a surge in demandfor generation and transmission projects. Asof late, a shift towards the oil and gasindustry with LNG mega projects in thenorth of the country has been recognised.

Recently, deugro established legal entitiesin Senegal and Mauritania – where offshoreoil discoveries have led to challenging EPCprojects. Both Mauritania and Senegalpresent interesting and growing demands forthe project cargo market.

With many land-locked countries on thecontinent, intra-Africa work is of primaryimportance. However, the continent’s roadinfrastructure does not support the cost-effective, long-distance movement of loadsexceeding 300 tonnes, so a stick-build ratherthan modularised construction methodologyis favoured in those countries.

Staples remarked: “Currently, mostcountries within Africa are not able tomanufacture specialised equipment that

legacy after projects are completed. Theseinitiatives include ‘up-skilling’ of the localwork force, capacity building, support oflocal institutions and businesses, and accessto deugro’s unique two-year managementtraining programme.

Infrastructure challengeInfrastructure, as Staples indicated, continuesto be a challenge in Africa, especiallyconsidering the locations of most greenfieldproject sites. But this situation is improving.

For example: “deugro has just finishedthe field work on a logistics infrastructureassessment in Kenya where positivedevelopments at the ports of Mombasa andLamu coupled with the extension of thestandard gauge railway will certainly deliverefficiencies in project execution andmitigate risk.”

Port expansion and development projects– such as those at Dar es Salaam and Nacalawill reduce congestion in the long term,ultimately saving time and reducing costs.

Elsewhere, for the LNG projects inAfungi, Mozambique, a marine offloadingfacility is under construction that will servethe project site. Handling over 2 millionfreight tons of cargo during the LNGplant’s construction, the facility will reducethe pressure on Mozambique’s other portsthat will still need to serve the country andits hinterland’s current and futureinternational trade. HLPFI

capital projects require; therefore, importsare unavoidable. But construction materialscan often be sourced within the continentand there is an increased capability inassembly and fabrication so intra-Africawork exists and will increase over time.

“This also contributes to local contentduring the life of the project and, hopefully,beyond,” he said, pointing out that deugrohas designed bespoke programmes tocomply with local content legislation andensure the company leaves a long-term


The power and renewablessector in Africa are also adriver for both greenfield andbrownfield projects.

– Danny Staples, deugro

A mobile harbour crane (LHM 550) and containerspreader was shipped by deugro from Santos to Nacala

in Mozambique. The cargo measured 65.67 m x 15.3 m x40.38 m and had a gross mass of 493.83 tonnes.

deug

ro

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SUPPLEMENTPROJECT CARGO AFRICA€¦ · 96 March/April 2020 Many fundamental growth indicators across Africa are positive. But political instability in various countries means that

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