Trade & Export

Sweden wants corporates to start dating Mozambique

africasc_admin — Tue, 22 Nov 2011 23:51:22 -0600

Who would think, 20 years ago, that a Swedish export promotion office would bother about Mozambique, one of the worlds poorest countries?

At the time the division between Swedish aid officials and Swedish exporters was notoriously sharp. A sort of Cold War situation right in the midst of the Swedish Government. A reflexion of the division of interest among Swedes - many would argue at the expense of what was good for Mozambique.

But, now, in a fast changing world, with old school aid being loosened up and mixed up with business interests, it is finally happening. A trade seminar on Mozambique is being held by the Swedish Trade Council in South Africa to promote business in one of Africa's fastest, albeit from a very low level, growing economies.

"In 2010, Mozambique outperformed its neighbors as the economy grew by 8,1%. Further high growth and heavy inflow of foreign aid and Foreign Direct Investments (FDI) is expected to foster infrastructure development and create opportunities for Swedish suppliers of goods and services. Mining and Agriculture are heavily expanding sectors that drive the economy and promote major investments also in the Energy, ICT and Transport sectors", the Swedish Trade Council, led by Håkan Bengtsson, writes in its invitational online brochure.

On the country to country level figures are also rosy, Swedish trade rose by 36 % during the first six months of 2011, but yet again, it is all from a very low level: Swedish Export in 2010 stood at 57 Mkr which is 0.01 % of Sweden's total export.

So which trade strategist in his or her right mind would bother about that kind of minnow? Waste of time?

The Swedish Trade Council doesn't think so, partially as it has promotion money from the Swedish Development Agency Sida to build a partnership with Mozambique. And as a good consultancy, Swedish trade councils are dependent on external consultancy incomes, it does what it is paid for.

If Swedish business will be interested remains to be seen. Former Swedish Ambassador's to Mozambique and the country's Government have always had a bit of an uphill struggle to get Swedish companies to Mozambique.

Its understandable that those who are selling consumer- and industrial goods haven't been overexcited. Mozambique's economy is indeed miniscule compared with its big brother South Africa. And it is fraught with corruption and byzantine commercial law. Buying property in Mozambique is to this day a no no. If yo don't want to get involved in years of legal wrangling that finally only will get you a a 99-year leasehold at the best. On top of that Swedish export companies are quite well updated on Mozambique through their regional offices in South Africa.

However what has been evident and well known among Swedes who have operated in Mozambique is that the country is bursting with fabulous mostly unexploited wealth - it is all well recorded and has been know way back to the Sixties when a large amount of feasibility studies were done.

While some Swedish companies, in particular ABB since it built Cahora Bassa in the Sixties, have kept its eyes wide open most have not bothered to go there. A civil war - fueled by apartheid South Africa - that raged up until the early Nineties, natural- and man made disasters leading to desperate poverty, was just not a very attractive mix for exporters.

But the situation has changed quite dramatically. Mozambique has picked up and is reestablishing itself. Infrastructure is being repaired. Regional trade- and investment from South Africa has given the country a new boost. And on top of that, most importantly, emerging economies in the South - China, India, Brazil - are showing a very active interest in Mozambique.

Some would say the comparative advantage Sweden had when it financed a large chunk of Mozambique's development budget has been lost. Sweden could have cherry picked among Mozambique's vast natural assets such as coal, gas, hydropower, agriculture and water resources, has been blown.

Other donors have been more pro-active. Britain even under Thatcher was a big donor to Mozambique. And some British companies, such as British Sugar, have benefitted and invested in vast sugar plantations.

Others would say 'its never too late'. And in today's situation Mocambiques growing economy is more suitable for advanced Swedish products and services - Swedish export is not very well tuned to deal with exploitation of natural resources.

A new cosy feeling for Mozambique is evident. You can't just sit back and do nothing as South-South trade is growing by leaps and bounds. So in that sense Mozambique has finally arrived. It is no longer seen as a hopeless aid basket case.

For old Swedish aid hands. all those thousands of Swedes who have worked in Mozambique over the past 30 years this should be good news. And Swedish business could make good use of them.

The Sweden-Mozambique trade seminar, moderated by Swedish Ambasador Ulla Andren and trade commissioner Håkan Bengtsson, is held on 1 December in Johannesburg. From the Mozambican side a number of representatives of 'key' ministries - energy, Infrastructure, agriculture and mining - are presenting their case.

(More info from Olov.hemstrom@swedisthrade.se and and karin.bolin@foreign.ministry.se )

SA to become member of Bricsa -effects

africasc_admin — Mon, 15 Nov 2010 01:03:25 -0600

South Africa has lobbied hard and furious the past few years to become a member of Bric, the lose alliance between Brazil, Russia, India and China. A membership now seems imminent as Russias president Medvedev has given South Africa his support.

A membership doesn't come with any massive benefits as such, there are a few economic agreements in place that the individual countries probably would have anyway. And there are no trade agreements. But a membership in the exclusive up and coming club does come with a massive amount of prestige.

South Africa's leaders will be able to mingle and do deals more intensely with the leaders of largest, fastest economies in the world.

South Africa would not qualify on the basis of its size, the country is tiny compared with the other member countries, it would qualify as the loose alliances Africa leg.

What's at stake for Bric is that it wants to continue its foray into Africa - and South Africa is the entry point. In that sense South Africa represents the continent in the club.

What does it men for those doing business with South Africa? Probably not much no papper. But it does mean that South Africa's leaders will have more and better contacts with their high-flying Bric counter-parts, which will facilitate contacts between oligarchs, moguls and black diamonds.

Having good relations with South Africa will become an even better idea than before.

Sundowner - Come and meet the Programme Managers from both FIFA and MTN

africasc_admin — Tue, 14 Sep 2010 00:41:38 -0500

Swedish Trade delegation

africasc_admin — Mon, 21 Jun 2010 09:25:45 -0500

The purpose of this Trade Delegation is fact finding but also to increase trade and strengthen business by identifying new projects, investment opportunities and local business partners for Swedish companies. The Trade Delegation will provide a unique opportunity to meet with several key decision-makers, government officials and representatives within chosen sectors.

In Ghana, there is already a strong presence of some of our major Swedish companies, but there is plenty of room for more. Ghana's government is active and encourages international investors with various types of benefits and incentives.

Ghana's growing economy offers opportunities in many sectors. Despite the global recession Ghana’s growth rate for 2009 was close to 5%. Some of particular interest are telecommunications, energy, infrastructure, mining, agriculture, environmental technology and the healthcare sector.

We value your input, and will do our utmost to accommodate your individual requests and preferences when finalizing the program. We look forward to your early response. Click here

Swedish Vattenfall in controversy over mine workers health in Namibia

africasc_admin — Mon, 17 May 2010 11:10:47 -0500

Swedish mainly state owned energy company Vattenfall's import of uranium from Namibia has shown the difficulty of being a nation of good-doers at all levels. The company is blamed for not worrying enough for Namibian mine workers health, but passes on some of the responsibility to the Swedish Governments recently implemented "partner cooperation" policy which recommends increased trade with Namibia.

In this case a report by a Namibian think tank, stating that Namibian workers are exposed to unacceptable levels of radiation which runs against a newly implemented Swedish partner co-operation policy pointing out Namibia as a favoured trading nation.

Swedish Vattenfall states in its defense of the company's purchase of uranium from Namibia that it fulfills all environmental, workplace and legal requirements after criticism in a report that Namibian mine workers are not adequately protected.

The company's head of environment, Agneta Rising, states that pictures broadcasted on a Swedish news channel, following a report on labour conditions at the Rössing mine, were "strong" but that Vattenfall stands by its decision to purchase from Namibia, which is one of four supplier of uranium to Vattenfall operated nuclear power plants. The other supplier countries are Canada, Australia and Russia.

Ms Rising states hat controls are very tight before any contras are entered into, including that the Vattenfall gets full insight into the suppliers operations.

"Radiation levels at the Rössing mine are on par with the natural background radiation levers. At these levers there is no correlation between radiation and health concerns", states Agneta Rising.

Vattenfall's view is contradicted by a report by the Labour Resource and Research Institute in Namibia which states that workers in the uranium mines run the risk of being exposed to radiation, but when they get sick they have great difficulty to prove that there is a correlation and therefore they don't get paid compensation.

The report, by the institutes head Hilma Shindondola-Mote, also states that workers are generally badly informed about the health risks they run.

As the nuclear power is on the rise, due to carbon emission related global warming the nuclear energy industry will find itself becoming ever more scrutinized not the least by think tanks and the media.

Vattenfall states it doesn't takes political decisions, but relies on the Swedish Foreign office for guidance. And the Swedish Governments officially adopted line is to encourage trade with the South West African desert nation through its freshly adopted policy of so called partnership cooperation - a policy that replaces development co-operation in countries that are too rich to benefit from financial assistance.

With some 20 percent of Vattenfall's uranium needs supplied by Namibia, uranium is the South West African desert Nations major export to Sweden by far.

Sweden and South Africa to trade empowerment "equivalents"

africasc_admin — Tue, 11 May 2010 00:00:00 -0500

Swedish companies will, through a new deal signed this week, be able to trade "empowerment equivalents" instead of giving away shares to black economic empowerment players in South Africa.This deal where Swedish companies will be able to pledge funds for various black economic empowerment projects - skills development, health projects, entrepreneur schemes - instead of handing out shares for free or at a discount comes after some four years of back and forth discussions between Sweden and South Africa.

Most of the some 100 Swedish companies in South Africa have managed well without entering the BEE arena mainly as their clients are in the private sector.
For some of the largest Swedish companies in South Africa, like ABB and Ericsson, the agreement will not mean that much. They have forged black economic empowerment deals long ago to please the South African Government and to make sure that they were able to win e.g. public contracts.

But for many others the equivalent idea could be helpful as they will be able to claim that they have black economic empowerment credentials by investing in separate vehicles that are not threatening ownership or board-room control.

To what extent the signed memorandum will be embrace by Swedish companies in South Africa depends on if there is anything in there for the them. Swedish companies have been involved in activities with the Swedish Government before through HIV-Aids- and skills development programmes. In these cases the incentive has been that the Swedish Government, through funds channeled through the development agency Sida, have subsidised the implementation of health- and human resources goals.

The new mechanism takes this collaboration a step further as it makes it possible for the companies to convert such activities to "equivalents" - with a little help from Swedish tax payers.

The new deal shows that the South African Government is becoming more relaxed about pushing a too rigid black economic empowerment agenda that so far has created a new free wheeling, big deal searching black middle class.

From Swedens point of view times certainly are also changing. Development cooperation is wound up in well heeled countries including South Africa, Botswana and Namibia. Instead new mechanisms of disbursing money are put into place - with the intention to tone down old cosy political links and scale up relations based on economics.

India's Godrey shows appetite for Africa's beauty market

africasc_admin — Mon, 15 Mar 2010 03:15:23 -0500

There is nothing wrong with the Indian family conglomerate Godrey's
appetite for Africa. The group, which backed out of a JV with Sweden's SCA in India
last year, has just purchased a Nigerian beauty brand for $ 108 m.

Godrey plans to build a pan-African base as it sees similarities and
synergies in consumer patterns and preferences, skin lightening cream not the least, between its home base and
Africa. The company also acquired hair care companies Rapidol (2006)
and Kinky (2008) in South Africa.

The Nigerian purchase confirms recent years trend where Indian and
Asian companies see clear opportunities in the middle- and lower end of
the African markets - segments that are less understood or desired by Western consumer
brands.

Sweden's Oriflame is one of a few foreign beauty care companies actually seizing the opportunity in Africa. Oriflame's strategy is very different to Godrey's though, being a direct sales company.

ABB's new order in DR Congo lights up the continent

africasc_admin — Wed, 17 Feb 2010 07:46:54 -0600

ABB's signing of a $107million with SNEL (Société Nationale d’Électricité), the national power company in the Democratic Republic of Congo, is one of the clearest signal since democracy was restored, that at least stretch between the Katanga province up to the Inga power station is getting back to some level of stability - at least that it is stable enough for ABB to take on the project.

The refurbishment of what is one of the longest electricity transmission systems in the world also means that a big step will be taken in linking up Sub-Sahara's powerlines in a joint grid.

The 1,700 kilometer system was in fact built by ABB in 1982 and was back then the world’s longest transmission line.

The company was never payed by then Zairean government led by dictator Mobutu Sese Seko but ABB (then Asea) had wisely enough an export guarantee in place (meaning that Swedish tax payers in the end had to pick up part of the bill.)

In other words history has caught up with ABB.

Swedish truck maker Volvo lands largest ever contract in Africa

africasc_admin — Fri, 22 Jan 2010 10:47:24 -0600

The $ 142 million truck contract from Alamoudi's cement company in Ethiopia is a clear indication that the country's economy is on a high growth path. Ethiopia is one of the fastest growing economies in Africa at present.

Other boom countries for the transport- and construction industries in Africa are Angola, the host of the African Nations Cup, and Tanzania.

Alfa Laval offers key to unlock Namibia's uranium mining

africasc_admin — Sat, 26 Sep 2009 11:54:48 -0500

Swedish industrial technology company Alfa Laval believes it has a clear cut case on how to contribute to lower emissions by helping Namibia to step up its uranium production for nuclear power use dramatically.

The Alfa Laval process would, states the company together with the Namibian company (project owner), will contribute in solving the problem with potable water in Namibia and generate necessary energy in the process.

The company could invest € 25-30 million in the uranium project in Namibia if the client’s own investment plans are cleared.

That way uranium mining in Namibia’s desert areas would become possible and profitable. In particular during times of high uranium prices.

It is more than just a nice idea. A potential client is carrying out a feasibility study on two mining sites in Namibia and a successful outcome would open up for financing.

Alfa Laval presented its case, a combined energy recovery and sea water desalination process, during a Swedish Trade Delegation visit to Namibia earlier this month.

The overall shortage of water is, together with energy, the main obstacle to overcome before Namibia’s uranium production can move up a gear.

Namibia's uranium potential, states an industry sources, could increase the country’s GDP by as much as 20-30 percent.

Namibia in 2007 produced close to 3000 tonnes of uranium, or around 8 percent of the world output. The country could up a gear or two if technology issues could be solved.

The export income would also make the countries own nuclear power ambitions a reality. Namibia presently imports most of its energy from South Africa’s largely coal based power plants.

The way the Alfa Laval desalination process works is that heat exchangers will transform steam from sea or brackish water into pure distilled water. While there are other competitive technologies, Alfa Laval’s titanium plate based technology has shown to be less costly when compared with RO technology in areas where waste heat is available, the company points out that operating and maintenance costs are lower and that it therefore is a cost-effective solution.

Another advantage states an Alfa Laval official, is that the technology is proven and works. The company has delivered desalinization plants to Brazil, Saudi-Arabia, Pakistan and Indonesia.