Big oil-producing countries have faced a double-hit in recent months: the sudden drop in prices of oil and the economic impact of the global pandemic. In the case of Angola, which entered both crises with an already weakened economy, how are its prospects looking? The Africa Report speaks to Sergio Pugliese, the Executive President for the African Energy Chamber (AEC), to find out.
Bolloré’s Philippe Labonne says: “Facilitating intra-African trade is the new logistics frontier”
Bolloré Transport & Logistics (BTL) is preparing to manage two new terminals in West Africa in the coming months, while continuing to expand its land base to better serve an integrating African market.
Through dry ports, industrial zones, maritime hubs and air hubs, the French group wants to maintain and strengthen its position as one of Africa’s leading logistics providers.
In this interview, BTL deputy managing director Philippe Labonne, talks about the company’s strategy in recent months.
The Paris Court of Appeal has ruled that a statute of limitations applies to corruption charges against Bolloré in Guinea, but the investigation in Togo continues. What is your reaction?
Philippe Labonne: We have no comments to make. We do not wish to comment on any ongoing proceedings.
BTL has been managing Cameroon’s Douala port for 15 years, but it wasn’t shortlisted for the concession of the container terminal at the beginning of the year. How did BTL find itself in this position?
Cameroon interests us because it is an important transit country, which is destined to become a regional platform if infrastructure is developed. It is part of the group’s overall strategy. In 2021, we will have a complete logistics system with six ports with a draught greater than 16m deep along the Gulf of Guinea (Pointe-Noire, Kribi, Cotonou, Lomé, Tema and Abidjan), which will considerably improve the continent’s connectivity.
We are now making significant efforts to improve intra-African logistics and the flow of flows to the hinterland countries. We are convinced that Africa’s growth will also depend on the growth of intra-African trade.
We have indeed built a model, of which we are proud, based on the complementarity and synergies between Kribi and Douala by allowing the port of Kribi to become the hub of the Cameroonian corridor in the sub-region while maintaining Douala’s assets in terms of local service. It is true that we feel that not everything is being done to ensure that this strategic infrastructure fully plays its economic and social role, which is essential for Cameroon’s future.
Why couldn’t BTL bid again for the concession?
This is a good question because Douala International Terminal (DIT), the consortium composed around Maersk and Bolloré, performed very well in Douala. We doubled the volumes and invested €75m, more than the €50m initially planned… While we could legitimately contribute to the renewal of the concession, we were prevented from doing so.
We were not selected even though we manage 75 terminals around the world. We asked the Douala Port Authority for explanations, but did not receive any. We therefore filed an administrative appeal with the Cameroonian authorities to understand the criteria that prevailed. We have also initiated arbitration proceedings, this time with the International Chamber of Commerce, so that DIT can claim to contribute to the renewal of the concession.
For the time being, we are awaiting the outcome of these proceedings with confidence. Our aim was to make the infrastructure logistics system in Cameroon work by ensuring complementarity between the two terminals (Douala and Kribi) and to avoid them hurting each other.
Let us return to the “BTL model” in Africa. Is it in line with current efforts to develop intra-African trade, including the African Continental Free Trade Agreement (AfCFTA)?
Our system is progressing in parallel with these efforts. We are very positive about this approach because our infrastructure will be used to support this development. There is the challenge of connectivity between ports and cities, which is a complex subject, but on which there is progress, very favourable signals, and investments from public authorities that will help to change the situation.
I am thinking of the investments that large cities make in urban and public transport: the Dakar train, the Abidjan metro, the Lagos blue train, etc. They will help to make life easier for people who will be working, but also to make urban logistics more fluid and thus to some extent improve connectivity between cities and ports and improve logistics.
Did you have this in mind for the port of Tema, Ghana, and for the second container terminal at the port of Abidjan? And, how can an operator anticipate these kinds of questions?
It is a subject that cannot be left to one operator alone because it concerns spatial administration and planning. But for the two examples you give, we have begun to think about them. The states and municipalities have taken up these issues. In Tema, the port project is accompanied by a project to develop an evacuation route from the port. As far as Abidjan is concerned, no private operator can have the claim, or the means to develop a large city. But we can have ideas, and work with the authorities.
On the other hand, they are very aware of the limits of co-management and the negative effects on the development of the economy. The Greater Abidjan project, which has the support of donors, including the World Bank, plans to build a bypass highway, and the port authorities have already planned to build a road to facilitate the evacuation of goods to the south-east of the city. For our part, we have taken a position on 40ha in an area of PK28 whose development we are planning and which will serve as a relay for the port with, we hope, a lagoon connection.
Do you agree with MSC that the port of San Pedro could very well become the “third terminal” of the port of Abidjan in the long term?
I think that San Pedro can be used as a corridor to Mali. On the other hand, it is located 300km from Abidjan… With the infrastructure already built or to come and the widening of the canal which will allow ships with lengths over 330m and depths of 16m depth to be accommodated, the goods destined for Abidjan have no reason to tranship to San Pedro.
The main corridor of Côte d’Ivoire will remain Abidjan for a long time because there are railways, roads, the population density… I know that MSC is positioned in San Pedro. It is logical that they say there is a great potential, but this is not to serve Abidjan. I do not believe that those with large vessels have an interest in making one more stopover and transhipment. The most important thing is that this series of deep-water ports will reduce the costs of exporting goods to Africa.
Will these ports generate enough traffic to be profitable?
What is very positive is that these different port infrastructures will increase the sub-region’s trade and give Africa the capacity it needs. The prospects of deploying factories for local processing and then re-exporting to other African markets are promising. I’m more worried about San Pedro. This port only makes sense in terms of the Ivorian authorities’ desire to develop the territory.
Do you share their vision that China will move part of its industrial base to Africa, and add value to products before re-exporting to Europe or Asia?
Regional trade accounts for 60% of the total in the Americas and 10% in Africa. The question is not only to re-export to other continents, but also to transform in Africa for Africa. Another increasingly important factor is the carbon impact. And transport produces CO2. Relocating production close to places of consumption, reducing the length of transport segments, these are major trends. Hence the need for a fairly close port facility. That is our vision. Priority must be given to transforming African markets into African markets.
Tema promises to be your biggest investment in Africa today. What will be its role?
We are partners with APMT and the government of Ghana. Tema alone represents an investment of US$1.25bn and includes the construction of a 1.4km wharf. Today, we have completed the first phase on time, with 750m of quay at a depth of 16m. In time, we will be able to handle up to 2 million containers per year. So the vocation of the port of Tema is first and foremost to be the gateway to Ghana. But Tema will also serve the hinterland, Mali and Niger. It will also be a transhipment platform for lines that will be attracted by nautical qualities.
Is it the largest terminal of its kind in Africa?
At this point, yes, it will be the biggest. And we believe that it will eventually serve the entire catchment area of ECOWAS. This is considerable, since it concerns more than 250 million consumers. Tema is therefore very likely to attract the semi-processing units I mentioned earlier, knowing that Ghana’s economy will benefit from the development of its hydrocarbon fields. The Ghanaian economy is therefore expected to grow strongly, especially as it can rely on a smooth democratic transition.
But do the road infrastructures, necessary to play this redistributive role on a regional scale, exist?
The authorities are working on it. After that, there is a subject for coordination. We have a 35-year concession, so there may be some time adjustment effects. But Ghana has the means to build quality road infrastructure. As is the case with Côte d’Ivoire, we are witnessing the emergence of countries that have become aware of the importance of working in a coordinated manner to develop their port, rail and road infrastructure. In addition, our Chinese partners have announced that they have more than $2bn in funding to implement for road infrastructure development in Ghana.
How are you working with Chinese groups?
We are working with the China-Africa Development Fund and CMG in Lagos, among others. We believe that partnerships in Africa are the best way to meet the expectations of states. Everyone has their own point of view, their own experience… The idea is to combine our know-how as an operator and our experience in the field with the Chinese’ ability to mobilize financing and implement it effectively. China, like other states, has ambitions in Africa, and I think that together we can move forward in a win-win scenario.
What are the details of the agreement reached with Chinese Cosco Shipping Lines last February?
We are helping them to continue their development in Africa. This year, they have entrusted us with the management of their maritime agency, so we are their commercial and operational representative in Togo and Benin. In Ghana, where we have set up a joint venture with 60 employees, we process all their ships and ensure their commercial development. There is therefore the support component of the shipping part, and the logistics operator component. We entrust them with flows and find transport agreements to ship our goods to Africa and the rest of the world.
What do you think of the Belt and Road Initiative?
This is an initiative that we perceive as evolving. Provided that the projects carried out correspond to the strategies of the countries and the needs of their citizens, it will be positive. If these projects make it possible to develop infrastructures that is useful to citizens and to find jobs for Africans, this should be encouraged.
Is BLT giving more priority to the land component in its development in Africa recently, as the projects in Nairobi and Diamniadio demonstrate?
The priority is to support the continent’s growth and to participate in the emergence of an African industry, well connected to ports. The idea is to unleash potential and deploy high-quality know-how, coordinated worldwide.
Overall, BTL is an integrated logistics operator. We are continuing our investments in ports, as we recently did in Egypt at Port-Saïd. For us, land logistics is a way to ensure a better flow of goods on behalf of our customers. Our strategy is to have hubs in Africa. We have identified 8 of them, such as in Abidjan, where we are building an “aerohub” so that goods can arrive by sea and be redistributed by air.
Where will these hubs be?
It’s sort of confidential, but I can tell you that we’re looking closely at Nairobi, Kigali, South Africa.
You mention Port-Saïd, but North Africa is not really Bolloré’s traditional playground.
We have a global vision for Africa. We have signed a partnership with the Suez Canal authorities to operate their ro-ro terminal and are associated with Asian partners such as Toyota Tsusho Corporation (TTC).
You are partners with TTC on the port concession project in Mombasa. What is the situation?
The discussions is not evolving at the moment.
Are you interested in the logistics real estate sector?
Yes, we have built a number of warehouses and plan to deploy our ‘eco-compatible’ real estate standards in Africa, which limit energy consumption and CO2 emissions as much as possible. In Africa as elsewhere, we will have our own stores and others that we will rent according to customer requests. We will continue our real estate investments in Africa, especially in the new areas. We have a basic project in Kribi, but also in Guinea.
No, no logistics base project, but we are working on a dry port project with the Djiboutian authorities. We have signed an agreement to jointly develop the Djibouti – Addis Ababa corridor and manage a dry port together.
What went wrong with BTL’s venture with Cdiscount into Africa’s retail market?
We have stopped the investment experience with Cdiscount, but we continue to provide services to e-commerce operators in Africa, including Jumia, who is continuing the adventure. What seems to be appearing on the market is that the new hypermarket projects have not met with the expected success. And that the model that seems to work – I say this with all reservations – is rather the cash and carry model. What is certain is that there is a strong appetite among investors for retail in Africa. I am not sure that the model is stable yet or well defined. Africa will find its own model.
This article first appeared in Jeune Afrique.