Mota-Engil Africa : The African Answer to African Challenges

Editorial TeamDonovan Smith
Editorial Team Donovan Smith - Sales Manager

Mota-Engil Africa has been delivering crucial infrastructure and services across a range of sectors since it began operations in Angola more than 70 years ago.

THE AFRICAN ANSWER TO AFRICAN CHALLENGES

A great deal of hope for Africa’s sustainable future hangs on the acceleration of infrastructure development. 

Every year around 12 million young people join the continent’s labour force, a figure which is only expected to rise as populations continue to grow. Indeed, if the latest United Nations medium scenario projections are proven correct, by 2050 the current populace will have doubled to 2.5 billion. 

If these millions of new working-age citizens are to be employed, Africa must industrialise. 

History has proven that a healthy stock of high-quality infrastructure in power, water, and transport is a key facilitating factor of industrialisation, creating an environment that enables organisations to thrive in their respective industries. 

The positive impact of infrastructure on economic growth and inclusive social development has been well documented by numerous social science disciplines and bodies like the African Development Bank (AfDB). High-quality infrastructure is essential for Africa to achieve the Sustainable Development Goals (SDGs) of the UN, Agenda 2063 of the African Union, and AfDB’s own High Five Goals. 

The latter estimates that the region’s infrastructure needs amount to somewhere in the region of $130-170 billion a year, markedly higher than the annual $93 billion published by Agence Française de Développement and the World Bank. 

However, this challenge also presents enormous opportunity, and there is optimism in the air from companies operating on the frontline of infrastructure development across the continent. 

“For many Africa is the continent of the future, but it has been our present for 72 years,” says Manuel António Mota, CEO of Mota-Engil Africa. 

“We are strong believers in the region and in its continuous development, and we are very confident about some of the recent steps taken in many African countries which will contribute to wider economic development.”

This sentiment is backed up by the AfDB, which points to examples from Ethiopia, Mauritius and Rwanda as models that other African nations can follow. 

In its 2018 African Economic Outlook report it says: “By attracting foreign investment and firms, even the poorest African countries can improve their trade logistics, increase the knowledge and skills of local entrepreneurs, gain the confidence of international buyers, and gradually make local firms competitive.”

SERVING SUB-SAHARAN INDUSTRY

Mota-Engil Africa is one of the largest native-born enterprises that works at the forefront of infrastructure development in the Sub-Sahara region. 

It has presence or interest in 16 different countries and is served by a 12,600-strong, with expertise spanning engineering and construction, waste management, mining, water and energy specialisms, among others. 

Mota elaborates: “We operate in engineering and construction across the entire spectrum of activities, with a big focus on all kinds of public and private infrastructure and buildings. 

“We are also very active as a mining contractor, and in construction works for mining companies. We have a strong presence across the continent on waste collection and treatment, where we operate in five countries already, with a big focus in Angola, Ivory Coast and Mozambique.” 

This presence culminates in a company which last year turned over $970 million and is currently sat on an order book worth $2.94 billion. Mota-Engil Africa is growing steadily, shown by the fact that 2017’s revenue was 21 percent (or $171.54 million) higher than 2016’s. 

“We are very active on concessions, and other investments, that can or will generate construction where we invest our own equity, including airports, roads, ports, energy, real estate developments, and more,” adds Mota. “We currently have some public-private partnership concessions under construction, while one is already under exploration.”

In terms of geographical footprint, Mota-Engil Africa is spread over 16 countries from east to south to west in the Sub-Sahara region. 

“We have had a solid presence in Angola since the beginning, and here we have a strong logistical base where we are able to provide support to our African operations,” Mota explains. 

“We are also well-established across Mozambique, Malawi, Tanzania and Zambia, with further operations in South Africa, Zimbabwe, Rwanda, Uganda and Kenya. 

“On the West African side, an area where we began operating more recently, we have a presence in the Ivory Coast, Guine Conacry, Cameroon, and most recently we have opened up an office in Nigeria. For the future, we are also tendering in Senegal and Ghana, and seek to potentially establish permanent bases, though if it is the right project we will act across the whole continent.”

Mota’s personal involvement stretches back a long way. Being a member of the founding family, he has been close to the organisation from a young age, formally joining in 2009 after completing his studies. 

He started working in Angola in 2009, and in 2012 was appointed as a board member of Mota-Engil Angola. Mota then became CEO of Mota-Engil Central Europe in June 2013 before moving to his current role in February 2016. 

AN ANGOLAN STALWART

Angola is where the entire Mota-Engil Group’s roots can be traced back to.

In 1946, Mota & Cia as it was then known was founded by Manuel António da Mota in Portugal, with operations exclusively in Angola until 1975 when the firm expanded into Namibia and South Africa. 

During this early period the Company worked on a number of important projects, most notably the completion of Luanda International Airport which was handed over in 1952. 

Through the 1980s and 90s Mota & Cia opened up branches in Gabon, Swaziland (renamed Eswatini in 2018), Malawi, Mozambique, Ghana and Tunisia. “In the 90’s we also started our expansion into other business areas such as mining, road and bridge concessions, waste management, water management, port concessions, and energy,” Mota adds. 

The turn of the millennium marked a vital point in the organisation’s development, the Mota family deciding to merge Mota & Cia with Engil, creating the Group that exists today. This prompted further expansion across the African continent, with the markets of Benin, Chad and São Tomé and Príncipe having been entered by 2006. 

Mota-Engil Africa formally emerged from a restructuring in 2012 which saw the Group organise itself into geographic business units. Further expansion came shortly with the entry into Zimbabwe, Zambia and Uganda being quickly followed by Rwanda in 2015. 

Current CEO Mota joined a year later, and today the entire Mota-Engil Group employs more than 30,000 people across 30-plus countries. 

MINING FOR AFRICA

Of these newer business areas Mota eludes to, mining has become something of a company staple. Asked to cite a project that instils a particular sense of pride, he points towards the Company’s ongoing involvement with Brazilian mining giant Vale in Mozambique. `

The work involves the execution of mining services that include drilling, provision of explosives, and load and transport of sterile and coal at Moatize, in the west of the country. The mine is Vale’s single-largest investment in coal, the success of which also being dependent on two railroads that connects Moatize to the sea. 

Mota-Engil Africa played an integral part in the development of the Nacala Corridor between 2012 and 2014, working on two geographically demanding sections of the 900-kilometre line in Malawi. One section involved the construction and renovation of an existing 100-kilometre stretch of railroad, while the second project entailed the building of a new 145-kilometre line between Kachaso on the Malawi-Mozambique border and Nkaya Junction in the district of Balaka, Malawi.

Mota-Engil Africa also completed rehabilitation and expansion work on the Sena Railroad in 2016. Now in operation, this 575-kilometre trainline connects Moatize to the Port of Beira in the south of Mozambique and is able to transport six million tonnes of coal a year. 

“Our involvement on the Nacala Corridor and on the coal mines with Vale makes us all at Mota-Engil very proud,” Mota reveals.  

“We started on the project from a very early stage and were able to showcase our capacities to be a key partner on the mining side and on the infrastructure side, both in terms of construction and maintenance.

“Naturally this is a project that keeps us all proud, as we have been able to integrate a lot of our areas of expertise, including the maintenance of infrastructure, which is a segment we also hold and carry large experience in.

“The project as a whole has been key to our success in recent years and transformative for the Group and our relationship with mining clients.”

Indeed, the work with Vale is just one of many examples showcasing Mota-Engil Africa’s expertise in the mining sector. The firm is also a contractor on the Moatize-Macuse Railway Logistics Corridor in Mozambique, a 639-kilometre railway that will transport coal from the mines of Moatize and Chitima in Tete to a new floating coal terminal off the coast at Macuse. 

Mota also highlights the Company’s work with Société AngloGold Ashanti as another important project, an ongoing contract involving the provision of equipment and installations at its Siguiri gold mine in Guinea Conkary. Based 850 kilometres northeast of Conkary, the country’s capital, the mine is a vital asset and processes around 30,000 tonnes a day. 

“The Siguiri and Moatize developments are projects where we have invested over $170 million in equipment and facilities, and in which we are very active,” Mota continues. 

“We have worked across several projects on the continent, with specific focus in Angola, Mozambique and Malawi. Today we also have a presence in the sector across Zimbabwe.”

This includes a five-year mining contract for the Hwange Colliery Mine, operated by Hwange Colliery Company, involving drilling works, detonation, and load and transport of coal. Situated in the remote western tip of Zimbabwe, the mine is back up and running following a two-year hiatus and is set to produce 200,000 tonnes a month. 

The country has an ambitious target of producing 10 million tonnes of output over the next two years, a figure which would enable it to begin exporting. 

Diversified

More than 70 years of continuous presence in Africa has allowed Mota-Engil Africa to diversify into many other fields of expertise.  

Mining projects amount to around 20 percent of the Company’s current backlog of contracts, a stream of work which amounts to more than $3 billion. Around 60 percent falls into the broad construction and engineering category, with the remaining 20 percent covering waste management and collection. 

“In the pipeline we have several more projects under discussion, some awaiting finance from the client or organised by us, and some which are public,” Mota says.

“However, we do not disclose our pipeline, as to not induce our investors into the wrong perception, as this can be very variable across the continent and sectors. As you can imagine, though, the combined value is considerably higher than what we actually have in backlog.”

Among its projects underway in Angola is a $165 million construction and resourcing of the first stage of Cabinda’s General Hospital, a development which began in 2017 and slated for completion in July 2019. Last year the Company completed construction of a pier, seawall and wharf to the city’s port. 

In Malawi, Mota-Engil Africa is delivering several road infrastructure projects, including an 82-kilometre road linking Thyolo and Thekerani and 95-kilometre highway out of Lilongwe. This adds to recently completed works covering hydropower stations and rail upgrades. 

Further west, the firm is engaged in a seven-year contract for urban cleaning, collection and transport of solid municipal waste in Abidjan, the capital of the Ivory Coast. These operations will involve around 280 vehicles and 2,000 employees who will serve 4.6 million citizens and collect more than eight million tonnes of waste. 

In order to cater to clients across this diverse portfolio, Mota-Engil Africa draws on a significant pool of locally-based resources. 

At any one time it has around 4,500 items of heavy equipment on site, with key materials stored at a warehouse in Viana, situated in Angola’s Luanda province. In addition to this, the firm holds complimentary warehouses in South Africa and across other countries in the region. Comprising 18,200 square metres of storage, the site ensures optimal levels of supplies are maintained according to operational needs. 

Precast factories and project camps help to enable self-reliance in remote and challenging areas, bringing prefabrication capability and project management closer to the client. Such camps also house the workforces responsible for delivering these developments. 

A network of quarries and aggregate batching plants supply vital construction materials to the frontline. This is made up of 19 plants in Angola, nine in other Southern African Development Community countries and three in East Africa, combining to offer an installed capacity of 2,940 tonnes per hour. 

“Our logistical and mobilisation capacity is what stands us apart in Africa,” Mota states. “Add this to the fact we are vertically integrated, and we are a unique player on the continent. We have a strong HR and asset base, and that allows us to operate independently across the different countries, with the capability to provide all construction works with in-house capacity.”

Staying ahead

Mota recognises that continual investment and a flexible approach to company development is crucial if it is to build on this formidable foundation. 

“Naturally we need to keep investing on our asset base and logistical areas to be able to stay ahead of the competition,” he says.  

“This is crucial, as new technologies are developing quickly, and not so many of them are seen on the continent at the moment. We will try to develop them and bring them into our projects in Africa at the same time as we implement them in other regions.”

Mining is a sector Mota identifies as especially ripe for technological advancement in the region. 

His confidence is backed by a study from Grand View Research which estimates the global mining automation market will be worth $6.2 billion by 2025, growing at an average annual rate of 7.3 percent. 

The need for optimising production costs, reducing human intervention, and changing the mining landscape are key growth-driving factors for mining automation. Increasing investment in digital technologies, including analytics and human-machine interactions, is also expected to be one of the key factors driving this trend.

Specifically, automated drone systems are expected to become an essential technology in future mining automation and digitisation activities, with several mining giants already adopting this to enable rapid data collection. 

Driverless vehicles form another lively subcategory and are already impacting African mining operations. Mali is set to become home to the world’s first fully autonomous underground mine by the end of 2018, the work of Australian gold miner Resolute Mining, which has spent $223 million rolling out automated trucks, loaders and drills at its Syama site.   

“Definitely on the mining side, automation of equipment is something that will occur, and which is not yet widely seen in the continent,” says Mota. “This is something we are keen to invest in, to make our operations more efficient.”

Technology aside, Mota also predicts that the way in which projects are planned and executed will change over time. 

“The way clients approach projects will change,” he continues. “Over previous years, many projects in mining have gone over budget, so we are continuously looking for more collaborative approaches where we can become partners and not simply service providers.

“This will, for sure, involve us integrating more of our range of services into proactive approaches to contracts. This will result in a reduction in capex for clients by transforming them into opex.”

Into Nigeria

Embracing the new also means expansion into previously unexplored markets. 

Earlier this year Mota-Engil Africa signed an agreement with independent oil producer Shoreline Group to create a new joint venture, Mota-Engil Nigeria. 

Not only has the creation of this division opened up access to Africa’s largest economy, but also the continent’s most prolific producer of oil. 

“Nigeria is a huge opportunity that we have not embraced before,” says Mota. “Before establishing the partnership, we held regular discussions with Shoreline Group to understand how we could better pursue these opportunities and enter into the market.”

In Shoreline Group the Company has found a formidable partner. Founded in 1997, with its head office in Lagos and an additional office in London, the firm has operations across Sub-Saharan Africa. Its portfolio of 16 operating companies, with more than 3,000 employees, includes Costain West Africa, Shoreline Power, GASLAND and TAFL, as well as others in the oil & gas sector.

“At the moment we are in the process of tendering and identifying further opportunities, with the aim of establishing our first project in the market,” Mota adds. 

“People are on the ground, and we hope to materialise the first project sooner rather than later. Both Mota-Engil and Shoreline believe there is space to develop a key player in the market, a player which is highly qualified and can make the difference.”

Mota is right to point to the size of the opportunity in Nigeria. According to the AfDB, the country’s infrastructure deficit constitutes around $3 trillion over the next 26 years, equivalent to about $100 billion annually. 

This presents Mota-Engil Nigeria with a potentially enormous market in which to thrive, not only as a business but also as a key contributor to the Nigerian economy. Indeed, at the time of the joint venture announcement, Mota revealed that the value of the projects on the table could be worth as much as $1.8 billion. 

Global reach

This new unit will sit under the wider Mota-Engil Africa business, which now constitutes one of three corporate divisions that are housed in the holding company Mota-Engil SGPS. 

Having started out exclusively in Africa in its first 30 years of existence, the organisation has since morphed into a global giant that operates far beyond the African continent. This no better reflected than by the fact that its three divisions – Africa, Europe and Latin America – operate 285 companies between them.  

Mota-Engil Latin America comprises 87 companies that generate more than $1 billion across eight countries, much of this coming from roads and highways projects in Mexico, Aruba, Colombia and Brazil. This has been a strong growth region for the Group, 2017’s revenue representing a 50 jump on the previous year.

The European business is the largest in terms of number of companies managed, with 154 separate businesses operating across six countries. 

Highway developments and waste management form a key part of the division’s annual turnover of $941 million, which largely derives from its historical home in Portugal and also from Poland, where it ranks in the country’s top 10 construction companies. 

In Africa, Mota is looking to reflect the wider company’s global reach in the way it approaches its own supply chain operations. Although much of the emphasis is on maximising local supplier networks, looking further afield is certainly an option being explored with increasing interest. 

“We have an integrated approach to the supply chain, with bases run out of Portugal, Angola and South Africa,” Mota explains. 

“All procurement requests follow through not only locally, but also worldwide. We are currently working on some partnerships to establish procurement bases out of China and Dubai to strengthen our integration and supplier base.”

INVESTING IN PEOPLE

If Mota-Engil Africa is looking internationally to optimise its procurement operation, employment strategy very much centres around providing opportunities for local people. 

Of the 12,600-plus employees currently on the Company’s books, some 91 percent are locals, a figure which rises to 94 percent in Malawi, 95 percent in Tanzania, 97 in Zimbabwe and 98 percent in South Africa.

“This is a key factor for us,” says Mota. “We try to keep our expat base to the bare minimum, and to develop local resources. In some countries we have been more successful than others, and each time we see more local people taking more responsibility within our organisation.

“Every year we run a trainee programme within the Group that integrates young people from across all our businesses and countries into one unique platform, allowing them to have visibility and integration with our workforce across all countries and regions where we are present.”

As well as developing and upskilling its own employees, Mota-Engil Africa also heavily involves itself in benefitting the lives of citizens in surrounding communities.

This partly derives from the spirit of philanthropy and solidarity instilled by the Group’s founder Manuel António da Mota, who championed positive and active participation in society. In December 2009, a foundation was set up in the founder’s name and forms a crucial part of Mota-Engil’s corporate social responsibility activities.  

The primary aim of the Manuel António da Mota Foundation is to promote, develop and support social initiatives, charities and cultural programmes covering education, health, environment and the arts.  

Although the foundation is based in Porto, the mottos it promotes can be found across all three corporate divisions, including in Africa. 

“We are very active in this area,” adds Mota. “Originally, we had an individual approach, but during 2018 launched the ME African Initiatives in partnership with the Manuel António da Mota Foundation, where the programmes in Africa are fully funded by Mota-Engil Africa.

“The primary focus is on education and health, and in time we will work on the basis of having one contract, one social action and/or programme, and we will dimension ourselves to achieve that objective through the course of the next period of years.”

BUILDING A BRIGHT FUTURE

And it is over the next three to five years that Mota aims to solidify the Company’s leading status across the continent, building on the foundations built over the previous seven decades, both in terms of business and community relations. 

Mota-Engil Africa can also impact the bigger picture. 

According to AfDB’s 2018 African Economic Outlook, the continent has a compelling case for accelerating its infrastructure development. 

First, it is a continent of small and open economies that will rely on trade as their major source of growth, and such international trade is no longer about manufacturing in one place and selling in another, the report says. Rather, “it is about cooperating across boundaries and time zones to minimise production costs and maximise market coverage”. Infrastructure is thus vital to the smooth running of these value chains. 

Second, given Africa is a relative latecomer in its economic development, the benefits to be reaped from improved infrastructure are higher than other parts of the world.  

Companies like Mota-Engil Africa, therefore, have the power to push forwards economic progress, especially given the wide reach the firm already has across the Sub-Saharan region. 

Outlining his key priorities looking ahead, Mota concludes: “We aim to establish ourselves as a leader in the continent in our areas of action. We have achieved that in many of the countries we are in, but intend to achieve this in all countries where we are present. 

“If, in three years’ time, we have doubled the number of countries where we are market leaders, that will be a big achievement. For that to happen, it is important to perform and make a difference in the countries we have more recently moved in to, and this is something we are doing step by step.

“On another note, it is important for us to expand in the countries where we are into diversified business areas, such as mining, waste management and treatment, and concessions. We aim to have a solidified presence across all sectors in all of the countries we are in.”

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By Donovan Smith Sales Manager
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Donovan Smith is Sales Manager specialising in showcasing innovation and corporate success across all our business magazines. Donovan works with c-suite executives, industry titans and sector disruptors to bring you exclusive features.