Angola’s exports are in high-demand, and AJS delivers them fast

Angola’s exports industry is booming, and its commodities sector is thriving. Transporting commodities has bocome key to the country’s success. One company that has changed the face of transportation and logistics in Angola, is AJS

 
Ship Anchored Quayside, Angola, Luanda Bay 

The phenomenal rise of Angola in the past decade – against a backdrop of global economic uncertainty – is nothing short of extraordinary, and no other factor has featured more than oil in the country’s growth story. Production and its supporting activities represent a large percentage of the nation’s gross domestic product and over 95 percent of exports (see Fig. 1 and Fig. 2).

What’s more, at roughly twice the size of Texas, the nation of over 24 million has demonstrated tremendous economic resilience, as its oil, diamond and iron reserves, together with its strong ties with the US – for which it is the number one African oil exporter – Europe and Asia, have propelled the nation’s economy upwards and onwards.

From the development of majestic skyscrapers… to the hugely oversubscribed flotation of the nation’s first soverign bond, it’s abundantly clear that Angola is on the move, and fast

Angola counts China, the US, India, Spain and Portugal among its leading export partners. Trade with Portugal, which once ruled Angola for over four centuries, is at an all-time high, and the country has invested billions of dollars in a wide range of sectors, such as media, energy, banking and construction.

Fig.-1

Having recently celebrated its 40th anniversary of independence, Angola’s transformation into an economic superpower can be seen not just in the country’s economic performance metrics, but also on the streets and beyond. From the development of majestic skyscrapers and shopping malls to the hugely oversubscribed flotation of the nation’s first sovereign bond, it’s abundantly clear that Angola is on the move, and fast.

Taking the country’s November-time Eurobond sale as an example, Goldman Sachs Group – the company charged with overseeing the offering – reported that the issue was more than four times oversubscribed, after receiving $7bn in demand for a $1.5bn bond issue. What’s more, the 10-year bonds marked the nation’s first international debt offering since 2012, and the response was proof enough that Angola’s capital markets – as much as its economy – are on course for brighter days in the months ahead.

Fig.-2

Under the leadership of President José Eduardo dos Santos, the nation has flourished, most notably since the end of the devastating civil war that first began in 1975. With a burgeoning skyline in the capital city of Angola, paved highways and much-improved development indicators, the Angola of today is vastly different than that of yesteryear.

The new Angolan entrepreneur
Behind this immense growth is a wave of new entrepreneurs looking to create innovative businesses and do their bit in propelling the nation to continued economic prosperity. One of the top business minds in the country is Luis Silva, the managing director and driving force behind Angola’s leading logistics and transportation Company, Antonio J Silva Lda Transportes e Logistica (AJS).

Headquartered in the thriving town of Viana, a suburb of Luanda, the company has a prominent legacy of supporting the Angolan industry and economy through logistics services and the transport of goods. Put simply, its success stands on the shoulders of over three decades of hard work by the Silva family and continues with its second generation of entrepreneurs.

Luis Silva, Managing Director of AJS
Luis Silva, Managing Director of AJS

Among the largest producers of crude oil in the world and a member of the Organisation of Petroleum Exporting Countries (OPEC), Angola is home to more than eight billion barrels of proven oil reserves and 300 billion-plus cubic metres of natural gas – naturally, fuel transport is one of AJS’ largest business lines. Not coincidentally, the company’s largest customer is state-owned Sonangol, the enterprise tasked with the oversight of Angola’s petroleum and natural gas production.

As the nation’s number one logistics provider, AJS also focuses on heavy machinery transport, container transport, fresh products and other consumer goods in both Angola and throughout Sub-Saharan Africa. The Integrated Logistics side of AJS, in operation since 2007, makes use of more than 300 collaborators to meet the specific needs of Angolan and international firms of all sizes, and the company has established a presence throughout the country with strategically localised logistics centres.

The centres in question, crucially, allow the company to reach all territories in a competitive manner, as well as support cross-border transport activities. AJS’ logistics services include receiving, inspecting, storing, preparing and delivering packages, and the company supports these activities with warehouse space, crane-equipped trucks, refrigeration space, forklifts and scales.

Starting from humble beginnings
While Silva’s parents formally founded AJS in 1992, the roots of the business trace back decades and are closely in keeping with the growth of Angola itself. The journey to what AJS is today has been an arduous one, as most journeys are in emerging growth countries, but it has been extremely rewarding for both the Silva family and the nation at large.

Silva’s entrepreneurial parents launched the first iteration of a family-owned business in 1975 with the launch of a trade shop in Luanda, which then quickly developed into a distribution hub for vegetables and beer production in the Cacuaco district.

To help facilitate their growing business, the Silva family purchased a first truck and from then on, everything changed. It was Silva’s father who originally decided the company would exclusively use Volvo trucks, and its fleet is now made up of more than 200 new Volvo vehicles. AJS’ relationship with the Swedish automaker has proven successful in the years since, and the durability of the fleet is tested daily on rugged routes running from the coast to inland areas, and into mining districts in the north.

The company’s focus fell first on land transport, specifically on bringing private clients into Angola during the 1980s and the Civil War. It was also contracted for the United Nations World Food Programme at the time, discharging 12 trucks in Luanda by ship and attending to the distribution of food to provinces where the programme was allowed to operate – namely Uige, Malanje, Kwanza Norte, and Kwanza Sul.

During the Angolan Civil War that ravaged the country, AJS was the only company operating out of Luanda for years, and was constantly under attack – yet it survived, and it is today extremely proud of its history. Silva and others see its survival, longevity and perseverance as a badge of honour for Angola. Today, the company is still family-owned and operated by Silva and his siblings.

Over time, AJS has grown into a full-service solutions company for the transportation industry throughout the supply chain, providing integrated logistical services, stock control, storage, and door-to-door transportation. AJS has been contracted with a multitude of organisations, including the dam of Capanda, Catoca Mining Society, Cuango and Chitotolo, and has also worked to provide support for road and mining projects throughout the country.

When asked recently what he and his family were most proud of, Silva spoke of his employees. “We’re most proud of our skilled work force since Angola’s labour force, as a whole, is very limited”, he noted. “We provide training for our employees not just in transportation, but in welding and other skilled professions. However, we are mostly proud of our contribution to the Angolan economy.

While Angola has China, the US, India, Spain and Portugal as its largest exports partners, trade with Portugal, the nation that once ruled Angola for over four centuries, is at an all-time high

Oil and related products are the main sources of income in Angola, and this means that reliable transportation is necessary, and that is what we provide. In fact, our largest customer is the state-owned oil giant Sonangol and 60 percent of the cargo transported is fuel.” Immensely proud of AJS’ continued success, Silva and his management team say they look forward to the challenges and opportunities that await them in the future.

As Silva and his team look to expand their reach, they are actively developing the company’s strategy to utilise all means of transportation and, in doing so, serve their clients in and outside of Angola. The government has also been diligently working on legislation that will allow transportation operators to make use of various transportation infrastructures. Not only is AJS continuing to expand its business within the oil industries, but it is also gaining a foothold in the mining industry, which again is highly dependent on safe and reliable transportation.

As a way of enhancing the nation’s mining industry and diversifying the economy, the Angolan government is creating mining development centres as a means of catalysing the growth potential of the sector. These efforts, together with increased and continued global investment in the sector, represent a significant tailwind for AJS and will help in great part in contributing to future growth.

The Silva family, celebrating the company’s 20th anniversary
The Silva family, celebrating the company’s 20th anniversary

AJS is also in the process of setting up its own training academy, where drivers will go through a rigorous programme to ensure that they’re the most skilled on the road. Here they will receive training on driving, traffic regulations, loading and unloading, engineering and mechanics, and the training will also be supplemented by a mentorship programme, led by executives to help develop commercial skills at all levels of the company.

When asked what he looks forward to developing, Silva noted his desire to sustainably grow the company and help it achieve new heights. “On a personal level, I worked with my mother and father in building AJS early on and I am excited to continue our legacy by ramping up the business on a daily basis.

“We’ve already implemented cutting-edge technology to all areas of our company, including our own software for fleet management in 2011 for GPS on our trucks, and I have been deeply involved in expanding the logistics side of our business, breaking through in brick and mortar solutions. We are also expanding in construction and we are always growing in areas and industries of distribution.”

Angola as a destination for capital
With one of the fastest-growing economies in the world, Angola has a wealth of natural resources that has succeeded in putting the country front and centre on the global map. It is among the largest producers and exporters of petroleum not only in sub-Saharan Africa, but throughout the world. What’s more, Angola is the third-largest trading partner of the US in the entire region, predominately because the US imports a substantial percentage of its oil from Angola.

Early in 2014, Total, one of the largest oil companies in the world, announced plans to develop a $16bn ultra-deepwater project 160 miles off Angola’s northern coast, slated to commence production in 2017. In doing so, the company will join Exxon Mobil, Chevron, Petrobras, Eni and Marathon Oil – alongside a handful of companies that have enjoyed successful drilling projects in Angola.

Additionally, the African nation is the third largest producer of diamonds on the continent, and there is an expected increase in production in the years to come. According to Silva, growth opportunities all over Angola are simply unprecedented, and not only in natural resources such as oil (see Fig. 3), diamonds, iron, and mining, in general, but in technology, tourism, hospitality, healthcare and agriculture.

Fig.-3

While Angola has China, the US, India, Spain and Portugal as its largest export partners (see Fig. 4), with Portugal, the nation that once ruled Angola for over four centuries, is at an all-time high, with the country having invested billions of dollars in a wide range of sectors, not least media, energy, banking and construction. The attractiveness of sectors apart from oil is indicative of the country’s gathering diversification, and the reforms made in recent months fall in step with the government’s commitment to sustainable development.

Fears that Angola’s economy is too one-dimensional are understandable, taking into consideration the country’s reliance on the black stuff, yet the pace of development, even in the prevailing low oil price environment, is telling. The economy is driven largely by the oil sector; this much is true, yet investors are fast waking up to the realisation that there are opportunities beyond petroleum in present day Angola.

There are several reasons for investing in Angola, according to Rui Santos Silva, Deloitte Angola’s Country Managing Partner. “There are excellent growth opportunities in multiple sectors. This is something clearly visible in Angolan professionals’ talent and in the country altogether, along with the potential of this specific region and its competitive position.

“Investors have a chance to create a new paradigm by exploring sectors with great potential beyond the ones that have defined the economic context until recently”, said Deloitte’s Silva.

“Adopting a very practical reasoning, investors should look at the diversity of economic success stories when deciding to invest in Angola.” Open market reforms have also done a great deal to underline Angola’s investment credentials. A new legal framework, together with a focus on improving the operating climate, has led investors from across the globe to consider Angola’s attractiveness as an investment destination.

Fig. 4

Key CSR
As a young nation looking to become one of the largest economic hubs of Sub-Saharan Africa, great care has been taken to ensure the growth of human capital. The country doesn’t feature in the World Economic Forum’s Human Capital report for 2015, though officials are clearly of the opinion that investment in human capital is essential if the nation is to progress in the coming months and years – hence why the government has invested heavily in technical and vocational training.

Today, President José Eduardo dos Santos is championing education reforms to better equip the next generation of Angolans and help the nation in its continued development. By observing global trends and incorporating a high baseline for education, policymakers have set about preparing younger generations for a brighter future. Giving back to society plays a large role in AJS’ corporate strategy, and contributing to the nation’s future is at the front and centre of Silva’s commitments as CEO.

The Silva family maintains a commitment to improving opportunities for future generations in Angola. AJS is a socially responsible company, and offers programmes that support education and local communities at various stages of their lives. As a part of its ‘Day for Doing Good’ programme, for example, the company has partnered with Camargo Corrêa Institute to provide school supplies and a generator for a primary school in the Benguela Province.

Through other efforts, AJS also helped rehabilitate a 20-classroom school in the Panguila municipality. And, in addition to initiatives in education, Silva and his organisation helps graduates with professional training and job placements.

As Angola continues to make strides to further develop its economy, the role of entrepreneurs like Silva and his company AJS are of vital importance. Though a drop off in oil prices has understandable consequences for the country at large, the present circumstances are being seized upon as an opportunity to diversify and conquer.

No longer singularly reliant on oil, policymakers there are fast making a name for the country as a budding investment opportunity, and the presence of companies much like AJS only serves to reassure investors that there are opportunities for the taking.

The Angola of tomorrow looks very different from that of only a few years ago, and was barely conceivable in times of civil war. As the country continues to develop and diversify its economy, it’s taking significant strides to improve the investment and commercial climate. For leaders like Silva, the future has never looked brighter.

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