The leaders of Ethiopia and Kenya are seeking to deepen cooperation with China at the second Belt and Road Summit in Beijing, while the Asian giant tries to find ways to rebrand its global development model
‘We’re not going to try and fight the Chinese’: Christian Combes, Africa director, Eiffage Infrastructures
Eiffage has created a sizeable niche in the African construction market, working with French multinationals and seeking out other opportunities for growth
French construction company Eiffage landed a big project in Ghana in October last year, strengthening its recent expansion outside of its traditional markets in Francophone Africa. Spearheading Eiffage’s continental strategy is Christian Combes, the Africa director of Eiffage Infrastructures, who has strong ties, in particular, to East Africa.
“I was born in Madagascar, I also lived in Rwanda for four years and seven years in Kenya, so I know East Africa quite well. I spent the majority of my professional life there,” says Combes, who worked with French engineering firm Egis prior to joining Eiffage in May 2012. Eiffage is France’s third-largest builder behind Vinci and Bouygues.
For the moment, though, Eiffage Infrastructures, which specialises in roadworks, civil engineering and metal construction, is expanding its footprint on the western part of the continent, where it has been established since the mid-1920s via Eiffage Sénégal. The parent company crowned its 90-year presence in Senegal in October 2016, with the opening of the 71km Autoroute de l’Avenir.
The first section of the toll motorway connecting Dakar to the new city of Diamniadio opened in August 2013, and the final phase connecting it to Dakar’s new Blaise Diagne International Airport opened in 2016. The entire project is the first greenfield road public-private partnership in sub-Saharan Africa.
Dakar and beyond
“We have history [with Senegal]. When you meet your clients’ needs, they will always come back,” says Combes. The company’s Senegal revenue was more than €70m ($86m) in 2017, half of the €140m it generated across the region.
Seeking to grow its Africa portfolio, Eiffage Infrastructures ventured outside of Senegal in 2014, securing a $98.6m contract to extend the national assembly building in Libreville, Gabon. Four years later, the group is rapidly expanding its operations across the continent.
Combes says that rising populations and rapid urbanisation provide growth opportunities that Eiffage intends to capitalise on. “Urbanisation means the need for public infrastructure such as water, roads, transport infrastructure. Urbanisation creates an important middle class that has increasing needs. It’s a huge opportunity,” he says.
Fellow French firm Bolloré Africa Logistics has been instrumental in the company’s Africa growth, entrusting Eiffage with several of its projects in West Africa. Eiffage completed the extension of the container terminal at Togo’s port of Lomé in June 2016. In September 2016, Bolloré awarded Eiffage a €47m design-and-build contract for the expansion of the container terminal at the port of Freetown in Sierra Leone. The project is due for completion in mid-2018.
We have history [with Senegal]. When you meet your clients’ needs, they will always come back
The group’s third project with Bolloré was sealed in October 2017, when its Eiffage Génie Civil and RMT subsidiaries signed a €104m design-and-build contract with a Bolloré-led consortium for a 97.6ha port platform at Tema in Ghana. The 26-month project is part of a $1.5bn plan to upgrade and expand the facility so that it becomes West Africa’s biggest port in 2019.
Bolloré is a tough client. “Up until now our operations with Bolloré have gone very well,” says Combes. “It’s a relationship built on trust, in this case with a very demanding client.”
In West Africa there is stiff competition for contracts from Chinese builders, such as China Communications Construction Company, which is spearheading infrastructure development along the Atlantic Coast. Like Eiffage, the multibillion-dollar Chinese conglomerate is involved in the Tema port expansion project, having signed a $476m contract in 2016 for the construction of a new container terminal.
Funding from state-owned banks means Chinese firms can often undercut their competitors. Says Combes: “We are not going to try and fight the Chinese. The problem is that they are state-owned companies, whereas we are privately held companies.
We don’t have the same objectives, we don’t work in the same way and our economic models are not the same. Due to funding from China Exim Bank, their prices are very low […]. So when we see them arriving in countries where they have a strong presence, we know there’s no point [in counterbidding].”
But Combes says where the Chinese have an upper hand in pricing, Eiffage can challenge them when it comes to quality: “We comply with local regulations and local taxation laws. We have high standards in terms of corporate social responsibility, environmental protection and security that they don’t have.
So we work in a completely different way,” Combes says. “Between a 30-year-old car that has done 500,000km and a brand new Mercedes, the price is not the same. That’s how civil engineering works today. Those who want to work with companies that meet deadlines, have high quality standards, employ locals – I would say choose Eiffage. Those that want cheaper infrastructure can choose the Chinese.”
The French-Malagasy engineer says Eiffage is in Africa for the long haul, eyeing projects not only in other West African countries but also in East Africa, where he already knows the ropes. “Our aim is not to cover all the countries on the continent,” Combes says.
“We’re simply looking at certain countries with more interest than others. And today that’s Côte d’Ivoire, Ghana, Benin and Burkina Faso. And in East Africa, it’s Kenya, Tanzania, Uganda.” Some countries will be avoided altogether due to the high security risk, and others, such as South Africa and Morocco, where there are strong local companies in the sector will not be considered.
He says there is not much difference between operating in Anglophone and Francophone Africa, and adds that Eiffage Infrastructures is expected to generate more than €100m in revenue next year, with the aim to triple or quadruple that in the next five years. “I think [if we get there] we would have worked hard.”