Guangdong firms investing in Africa

Private companies are increasingly opening branches on the continent

GUANGZHOU - A shipment of wood has just been transported from Gabon in Central Africa to Guangzhou, South China's Guangdong province. After being painted and assembled, the wood will be sent to European and American countries.

In 2012, Yihua Group set up wood processing and production bases in Gabon, participating in the country's green industry and using environmentally friendly methods to cultivate 350,000 hectares of forest, creating jobs for more than 1,000 locals.

In recent years, more and more private firms in Guangdong have invested in Africa. According to the provincial commerce department, 244 companies from Guangdong had set up branches in Africa by the end of 2017, among which 241 are private firms.

"Private firms, full of vitality, have been actively investing in Africa in recent years and are optimistic about Sino-African cooperation," said Liu Jisen, executive vice-president of the Institute for African Studies at Guangdong University of Foreign Studies.

China and African countries have complementary advantages in labor, natural resources, industrial structure, finance and technology, said Xu Chuwu from the African General Chamber of Commerce.

According to customs data, Guangzhou's import-export volume to Africa reached 87.35 billion yuan ($12.8 billion) in 2017, seven times that of 2006. Mechanical and electrical products are major exports and diamonds and resources are major imports.

Guangdong Shineng Electric Equipment Group Ltd has invested in power plants and power equipment factories in Uganda in the past eight years, with its products accounting for 80 percent of the local retail market. The company is also expanding its business in countries including Kenya, Madagascar, Rwanda and Nigeria.

An industrial park was also opened in Uganda in August. Besides a steel plant and a tin smelter, a brick factory and a slag grinding plant, which both use steel slag as materials, and a sewage treatment plant were also built.

"We not only lift the products' added value, but also make efforts to protect the environment in the park," said Lyu Weidong, chairman of Guangzhou Dong Song Energy Group Co Ltd.

With Sino-African relations deepening, cooperation has also gradually expanded from trade, construction and infrastructure to medical services, environmental protection, tourism, education, culture and technology.

Artepharm Co Ltd China, co-founded by Guangdong New South Group Co Ltd and Guangzhou University of Chinese Medicine, carried out projects in the Union of Comoros with an aim to cure malaria.

By 2014, malaria cases decreased by 98 percent compared with those before 2006, and no malaria-related deaths were reported, said Chen Yuejin, vice-president of New South Group. In addition, the company is planning to build 10 new medical centers in Africa.

To better match the needs of both private firms and African counterparts, commerce chambers and industry associations have been established. The Africa Investment and Trade Alliance, initiated by the China Council for the Promotion of International Trade Guangdong Committee, has recruited more than 100 members, said Lin Tao, the committee's president. The committee also established a commerce chamber in Kenya this year.

"We are building a platform for the two sides to communicate and share information, integrate financial resources, improve investment mechanisms and help firms build wholesale centers, sales bases and industrial parks in Africa," Lin said.