Chinese project to create 100,000 jobs

Above: Leaders of Latin American and African countries at the New York Forum Africa in Libreville, Gabon, on May 23. Below: A participant of the forum reads China Daily African Weekly. More photos on Page 5 Photos by Zhang Wei / China Daily

Company plans to invest in palm oil and grain production in west and central Africa

China's biggest palm oil producer will launch a $2-billion investment spree in Africa that is expected to create more than 100,000 local jobs over the next five years, a top executive of the company says.

An Ning, vice-president of Julong Group, says the company has surveyed several possible locations in west and central Africa for its initial investment, a palm oil plantation, which he is confident will go ahead this year.

The plantation will be the first in a series of planned investments worth a total of $2 billion by the company in several African countries over the next five years.

In all, Julong intends to develop 300,000 hectares of land for palm oil and grain production in Africa.

"We are definitely going to invest," An says. "Since 2012, we've been conducting large inspection tours in Africa and opened an office in Ghana. We are looking at opportunities in countries in central and western Africa. We are still in the process of deciding on an ideal location, (for the palm oil plantation) but definitely we will invest in the region. We are expecting to start a project by the end of this year."

The estimate of 100,000 new jobs is conservative, An says, as it does not include support staff.

An was part of a delegation from Julong that attended the New York Forum Africa in Gabon between May 23 and 25, in which more than 800 global business leaders and politicians gathered to discuss growth strategies for what panelists touted was the "most promising continent of the century".

An says the forum was the perfect opportunity to exchange ideas about agriculture with representatives from all over the world before his company's move into Africa.

"We've learned a lot here at the forum," he says. "People from different countries have different views about farming in Africa. Generally, they all want to see a sustainable model for agriculture in Africa. China has been assisting Africa with agriculture on many different fronts, including setting up agriculture demonstration zones. Our company hopes to do its part."

An also revealed Julong's new investment would precipitate a move into the African consumer market.

"We are not a mining company that sells resources back to China," he says. "We sell according to market demand globally. Of course, our primary target will be the African market. At the moment, only one or two (African) countries can produce enough to meet their domestic demand for palm oil. There's no need to sell our (African-produced) palm oil back to China."

News of the Julong investment came as the firm behind another high-profile project in Africa, China Harbour Engineering Company, told China Daily it had almost hit the halfway mark in a foreshore redevelopment for Libreville, Gabon's capital.

The $120-million contract for the first stage of the redevelopment of the foreshore, awarded by the Gabon government, was signed with much fanfare by China Harbour Engineering Company at last year's New York Forum.

Zhao Yang, China Harbour's deputy director for Gabon operations, says about 100 local employees and 30 Chinese workers are engaged in the 14-month reclamation stage of the development, which is on track for completion later this year.

About 40 percent of the planned 350,000 square meters of land has already been reclaimed from the ocean, with tenders to build infrastructure, several hotels, residential towers, a 200-berth marina and public buildings expected to be up for grabs soon.

Zhao says China Harbour Engineering Company will bid aggressively to win the next stage of the development when the reclamation stage, which includes a 300-meter causeway that leads to a 200-sq-meter man-made island, is completed.

Serge Ndong Obame, a public relations officer for Gabon's national agency of infrastructure, says the development is "significant" for the capital and could create more than 2,500 jobs locally.

"It will certainly promote a lot of tourism, which will help the economy," he says.

Obame says the Gabon government will set up a bidding process for the second phase of the construction early next year.

"It's open to all companies to bid but Chinese companies usually have a good reputation for following through with their work here in Africa," he says.

Sudanese-born Omer Saeed, an agricultural economist who works for the United Arab Emirates government in Kenya as part of a team that identifies investment opportunities in Africa, says the type of major operation Julong plans could be lucrative for the locals.

"Agriculture, in my opinion, will be the main tool for Africa to develop," he said at the forum.

"In most African countries, about 80 percent of the population are involved in some form of agriculture, but it's suffering from low productivity. It is traditional, subsistence farming.

"I think it (large agricultural investment from China) is good for Africa. The importance of investment is not only money; it's a transfer of knowledge and technology, of raising the standard of living for people."

But Saeed warns that agriculture, unlike more secure investments such as mining and infrastructure that attract most Chinese investors, could be difficult to get off the ground in Africa.

"There are a lot of problems for investors. Land ownership is often unclear and infrastructure is not adequate. But generally speaking, the potential is there: huge natural resources, and cheap labor."

An conceded Julong's move into Africa would probably be difficult and expensive, but he believed the investment in local people and infrastructure would pay off in the long term.

Saeed says Africa, with its proximity to the Gulf states, has the potential to become an agricultural exporting powerhouse.

Julong will become the latest in a series of Chinese investors that have pumped money into Africa.

There are now more than 1,600 Chinese development finance projects worth $75 billion in more than 50 African countries in sectors including health, education, transport, storage, infrastructure and resource extraction.

Richard Attias, founder of the New York Forum Institute and co-founder of the New York Forum-Africa, says partnerships that unlock the competitiveness of the continent's economy will promote further growth and create jobs.

"Putting Chinese companies together with US and European companies and building joint ventures in Africa, is the future," he says.

Contact the writes through josephcatanzaro@chinadaily.com.cn

(China Daily Africa Weekly 05/30/2014 page3)