New hot-dip galvanising plant at Capital Star Steel will enable local companies bid for LNG projects
A US$12 million investment at Capital Star Steel in Beluluane Industrial Park will see the construction of the biggest industrial Hot Dip Galvanising Plant of its kind in Mozambique. This installation will enable the production of specialised coatings for steel products that meet the international standards and requirements for gas pipelines, LNG process plants and general infrastructure. Consequently, local engineering contractors will be able to bid for the increasing demand for galvanised steelwork required by the Mozambique LNG and Rovuma LNG projects.
Commenting on the importance of this investment and the Mozambican Government’s drive for Local Content, Capital Star Steel CEO David Scheepers said: “We are proud to be part of the development of the economic structure and industrial manufacturing base of Mozambique. With an initial investment of over US$100 million in 2007, Capital Star Steel has been one of the largest investments in the Mozambican engineering sector. The galvanising plant is another investment that will enable our sector to develop international capacity and provide services that will benefit our economy in the long run.”
Historically, the investment of galvanising capacity in emerging markets have a resounding effect on the stimulation and growth of those economies. Scheepers said that Mozambique should be no different. As a country with a coastline of over 2 470 kilometres, and with the bulk of industrialisation taking place along the coast, the use of galvanising coating is recognised as the main solution to protect steel structures used in building bridges, transmission lines and towers, highways, airports, factories and plants such as Mozambique LNG and Rovuma LNG.
“Preliminary estimates for galvanised steel structures of Phase 1 of Total’s LNG project will provide Mozambican companies access to more 60 000 tons of steelwork opportunities, generating over 1200 direct jobs valued an estimate of US$160 million,” Scheepers said. “Including ExxonMobil’s Rovuma LNG and the recent announcement by Total of a possible further 2 trains, the opportunity for Mozambican fabricators could exceed 200 000 tons, a growth prospect generating significant employment opportunities and foreign investment into this sector.”
Beluluane Industrial Park Managing Director, Adrian Frey also commented: “This is excellent news for all local companies that are positioning themselves as suppliers to the LNG projects and other industries. It is an important step for local content development in Mozambique.”
About Capital Star Steel
Since 2009, Capital Star Steel has produced over 225,780 producing pipes totalling over 2,700 kilometres with exports to the USA, South Africa, Botswana, Swaziland, Kenya, Zambia, Nigeria and Eritrea. It is the largest steel pipe manufacturing plant on the African continent. Operating from the Beluluane Industrial Park and Free-trade Zone, the 108,760m2 facility comprises of a 34,780m2 undercover factory and has a production capacity of 200,000 tons.
Beluluane Industrial Park and Free-Trade Zone is home to Mozal and 40 companies from 15 different countries, supporting a workforce of 5000 employees. Beluluane Industrial Park is a Public-Private-Partnership between the Mozambican Government Agency for Investment and Export Promotion (APIEX) and Swiss-Mozambican Investors. The Park’s mission is to support its clients with the necessary infrastructure and value-added services to successfully conduct business in Mozambique. Managing Director Adrian Frey answered some questions about the park:
Q: What makes Beluluane Industrial Park such an attractive location for business?
A: The park is situated in Boane, Maputo Province. It sits on the backbone of the Maputo Development Corridor and offers the best entry to the SADC, Asian and European markets. Companies operating within the free-trade zone may qualify for attractive exemptions on customs duties and tax offered by the Mozambican Government. We are located in one of the most industrialised and productive regions of Mozambique and have access to the biggest industrial workforce in Maputo Province. We know that almost 30% of industrial employment in the Maputo Province comes from our park.
Q: There have been some positive recent changes at the park?
A: Yes, we have invested in Beluluane Industrial Park in 2017 and since then turned the business around! Since we took over, we have secured 10 new companies that will create over 1000 new jobs! Our leadership and operational team have extensive knowledge in helping investors enter the Mozambican market. We have a very dynamic team of young professionals who serve as an example how young Mozambican people lead business development in Mozambique.
Q: You have a new development plan. What is your long-term vision for the park?
A: Our strategic plan includes the further development of roads, fencing, energy, water, drainage, sanitation, security and landscaping. We are fully invested in maintaining world-class environmental standards. Beluluane will have dedicated zones for downstream aluminium, heavy & light industries and a dry port. The long-term vision is to develop a multi-sectoral park that will serve the fast-growing Mozambican and regional markets. To date, Mozal has been the anchor project and many were established to service their needs. The presence of Mozal offers ample business opportunities to companies locating there as suppliers of components and services for its operations.
Q: The park companies and neighboring communities are separated by the green belt buffer zone that runs around the perimeter of the park. What is the purpose of this?
A: Government established the green belt buffer zone in 1997 when the land for Mozal (300ha) and the park (600ha) was allocated. The main purpose of this zone is to protect the environment and the people in our surrounding communities. This was approved by the resolution 2/99 (revised by resolution 1/2000) of the Provincial Government, following a pre-approval from the Council of Ministers (see Mapa 11 for details). All occupants of this area where compensated and resettled to Djuba, which means that the area is since then reserved only for developing and protecting the natural environmental and habitat. Beluluane Industrial Park is committed to the sustainability of our land and park companies can therefore not make direct and uncontrolled use of the Matola Rio.
Q: Which value-added services do you offer?
A: We are a one-stop-shop for investors that establish their business in the park. As a result of our Public-Private Partnership with APIEX, we are able to facilitate relationships between investors and the various governmental institutions. APIEX was created in 2016 to promote and facilitate investment, bringing together the promotion of public and private investment and exports. The role of APIEX is to support the Mozambican business environment, optimise resources and create greater synergies in areas that impact the country’s economy. We also support our clients with regular workshops to ensure they are up to date with legislation and other developments in the industrial sector.
Q: What are some of your biggest challenges?
A: There is a growing need amongst our clients for better skills. We partnered with the UK Aid and the JOBA Programme to bridge the gap between young graduates and employers. Our internship programme is a first for Mozambique and offers young graduates the opportunity to gain practical skills at the park. We are committed to promote youth employment. Further to creating 1000 new jobs, we are also promoting entrepreneurship and have opened a training centre.
Q: What does the future hold for Beluluane Industrial Park?
A: Mozambique’s investment deal pipeline is promising over US $100 billion in the next 10 years! The industrial sector is showing more than 6% growth per annum and there will be many opportunities for downstream aluminium, industrial manufacturing, construction, transportation, logistics and food processing. We know that our prime location, dynamic leadership and complete services offering will allow us to expand and host more than 500 companies.
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