Construction services firm eyes infrastructure boost

Construction services firm China CAMC Engineering Co Ltd is further expanding its presence in Africa and looking to participate in more local projects via investment-construction-operation, a senior company executive said.

"We are gearing up to spend more money and resources to develop the rapidly growing African markets, "said Liu Shengcheng, vice-president of CAMCE, a subsidiary of China's State-owned China National Machinery Industry Corp (Sinomach). "With the industrial upgrading and transformation, I believe there is huge room for growth in African markets in the future."

The company aims to be an internationally renowned investment development and engineering services provider, and will focus on areas related to local people's livelihood and projects that bring economic benefits and improve the local infrastructure.

According to Liu, the company is currently looking for investment projects in Ethiopia, Kenya, Zambia, Tanzania and other African countries.

"We are looking to develop our business in Africa by way of investment-construction-operation, especially in the fields that we are familiar with, such as factory construction, agricultural products processing, water treatment and power projects.

"Buoyed by the Belt and Road Initiative, more Chinese companies are accelerating their push to go global, providing strong support for African infrastructure construction," Liu said. "As African infrastructure has greatly improved, Chinese firms need to focus on production capacity cooperation, especially in the field of investment.

"After 40 years of development, China has accumulated abundant experience in fields including industrial planning, enterprise management and technological research and development. Implementing projects with the investment-construction-operation model will be a win-win strategy for both sides. For China, it will bring long-term benefits. For Africa, it will alleviate the government's debt burden and create more jobs for local people," Liu added.

Founded in 2001, the Shenzhen-listed CAMCE mainly focuses on international project general contracting, domestic and overseas investment and trade business. The company has signed new contracts worth over $5 billion within the markets related to the Belt and Road Initiative between 2013 and 2018.

To date, the company has set up branches in 14 African economies. It has operated a wide range of projects that cover fields including industrial engineering, power engineering, transportation, water projects, agriculture, petrochemicals and mining.

"We have participated in not only many infrastructure projects but also many industrial projects that help create revenue. With the improved African infrastructure construction, the next focus will be industrial projects," Liu said.

He said Chinese engineering companies have worked closely with those from developed countries in African markets, instead of fiercely competing with them.

"Many African countries can hardly afford the cost of projects taken by companies from advanced countries. Actually, developed countries mainly serve as investors, consultants and equipment suppliers in African markets," Liu said.

Among CAMCE's ongoing projects, the Welkait sugar plant project in Ethiopia stands out.

Located in Tigray province in northern Ethiopia, the project has a contract value of $647 million. The project includes the construction of a sugar plant with daily sugar cane crushing capacity of 24,000 metric tons and a bagasse-fired power plant, which will help make up locals' demands for sugar and power.

Once completed, the project will directly create 1,000 jobs, and the supporting production business and living facilities will offer job opportunities for more than 10,000 people.

Mark Greeven, professor of strategy and innovation at Switzerland-based International Institute for Management Development, noted a whole range of African countries with large populations and strong economic development offers great opportunities for trading partners like China.

"As the two sides have very different cultural backgrounds, it is important for Chinese companies to realize and understand the way of doing business in Africa," Greeven said.

Actually, Liu said the company was looking not just to expand in African markets but to focus on facilitating localization in those markets. "We will further expand to more countries in Africa. To better cater to the local markets and build better relationships, we will subcontract almost all civil engineering work and hire locals to help operate our African projects.

"We need to localize our overseas business to deal with problems as locals do, which will benefit both sides and help increase mutual understanding."