Angolan investment holding company launches new initiatives and interests

Angola has recently been enjoying more political stability and the benefits of an economic boom that began in 2002.

Although the economy slowed in line with global trends after the 2008 credit crunch, Grupo Gema has consistently bucked current business trends and posted high growth rates.

Since starting operations over 20 years ago, the group has been led by Jos Leito.

Grupo Gema remains one of Angola's fastest-growing private initiatives with controlling interests in a diverse field of industries. The company has interests in the petroleum sector through the subsidiary, Geminas. Grupo Gema heavily invested into real estate and construction. The company plans to expand in agriculture and industry.

The estimated turnover of the group is $1.5 billion, even though the company first started with just a little capital. "Some 20 years ago we started with small projects, but utilized a strategy by making partnerships to expand," he said.

"We are consolidating our interests and looking at other business opportunities. We seek to get more involved in the industrial sector and agriculture to help the country rely less on imports," he added.

The policy is in line with the wishes of the Angola government, which wants to diversify the economy and reduce imports on Food stuffs and construction materials.

Leito cooperates with the Angolan government and has always had a close working relationship with President Jos Eduardo dos Santos. He believes his successful business career stems from his political experiences and partnership with the government. "It was a great experience since I can see what the government wanted for the country and then I could deliver that in the private sector," he said.

Luanda Shopping Center to transform Angola

The company is running a flagship project accounting for a total investment of almost $500 million. The Comandante Gika project is the largest of its kind in Angola, as well as one of the largest building projects in Africa.

Constructed on a site where the military school, Comandante Gika, was located, the project is expected to deliver a pivotal housing, business and recreation complex and is planned to be completed by the end of 2012. It has already employed 3,500 workers and covers an area of 307,000 square meters.

The project will include construction of a three-floored shopping mall called, "Luanda Shopping," with more than 200 stores, a hypermarket and a 10-screen cinema theater. The parking lot could hold 1,600 vehicles. Another parking lot for 500 vehicles will be located near the two 21-story towers housing and office complex. The Luanda Shopping Center could transform into an exclusive business hub.

Another two 25-story towers will house 136 luxury condominiums that include a five-star hotel, "Hotel VIP Grand Luanda," which will feature a heliport. The hotel will offer 300 rooms and 70 suites with first-class recreational facilities. When up and running, it will provide at least 6,500 qualified jobs for locals.

At a time when many developed economies, let alone developing economies, are struggling with a housing and construction crises due to a lack of liquidity, Gema is making a bold move. Leito said, "in spite of the economic crisis and the global downturn we believe in the project and in the national real estate market."

He may be right. One year before construction is due to be completed, all but two of the office areas were sold, 70 percent of the apartments were purchased and up to 80 percent of the shopping mall units were leased. Angolans have tremendous self-confidence that good economic times still lay ahead and many are investing in real estate to enjoy another boom.

Expanding outside the capital city

Leito sees the necessity for similar initiatives to spread across the country. For a long time, many of its investments have been Luanda-centric and there will soon be a push to develop into the outlaying provinces. Leito described how he intends to invest outside the capital city.

"Our future strategy is to get involved in public tenders that fall under our areas of expertise such as in energy or water related developments," he said, while adding, "as a country we should create better countrywide infrastructure and Grupo Gema should be involved."

Comandante Gika is one of the largest projects for Gema, but the group is investing in other sectors to contribute to the country's development.

In 2010 Grupo Gema participated in building a steel plant in the Bengo province. According to Leito, the project, in partnership with a Spanish company, is valued at $100 million with a production capacity of 500 tons of steel per year and would follow the same pattern of investing in projects that secure a better future for Angola and to reduce a reliance on imports. The group is investing heavily into a cement factory in Benguela province.

In 2010 the group laid the foundation for a major investment in the agricultural sector by announcing its interest to buy the rice plantations of Cuando Cubango and the company announced in the same year, it would build 1,000 homes on land reserves in central Huambo province. Leito noted this would alleviate housing shortages in the region and represent a good business strategy.

What scope is there for Chinese companies to get involved? Gema has not yet worked directly with Chinese partners, but Leito acknowledges that he indirectly felt the benefits of Chinese investments in Angola. He explained how he is open to new partnerships with Chinese companies and noted they should be willing to venture with Grupo Gema in the provinces, since that is where they are most needed, but it could bring about big-time profits in the years ahead.

China Daily

(China Daily 02/29/2012 page36)