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    • Construction Industry Mozambique

    The Construction Industry in Mozambique 2017

    Carole Veitch | Mozambique | 10 August 2017

    The Construction Industry in Mozambique 2015

    Carole Veitch | Mozambique | 21 September 2015

    The Construction Industry in Mozambique 2015

    Carole Veitch | Mozambique | 04 March 2015

    The Construction Industry in Mozambique 2014

    Carole Veitch | Mozambique | 22 September 2014

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report examines current conditions in the Mozambican construction industry, as well as recent developments and factors influencing the success of the industry. It identifies construction opportunities in all sectors of the Mozambican market and also provides an overview of regulations and government policies pertaining to construction and infrastructure development. The report profiles 29 notable construction companies operating in the Mozambican market. These include the established players Mota-Engil Mozambique Lda, which is a wholly-owned subsidiary of Euronext Lisbon-listed Mota-Engil SGPS, NCC Mocambique Lda, Cmc Africa Austral Lda, and the indigenous civil engineering and construction company, Ceta Construções e Serviços, as well as the American contractor, Chicago Bridge & Iron (CB&I), the Italian firm, Saipem and the Japanese company, Chiyoda, which have been contracted to undertake major construction projects in the burgeoning energy sector.

    Introduction

    This report examines the construction industry and infrastructure development in resource-rich Mozambique. Although small and underdeveloped by global standards, the Mozambican construction industry plays a pivotal role in the country, as it supports all sectors of the local economy and is one of the main drivers of socio-economic development and job creation. During the past decade, infrastructure development has taken place across all sectors of the Mozambican economy on an unprecedented scale, buoying the country’s construction industry. A sustained period of consistently high economic growth came to an end in 2016, after a scandal involving undisclosed government-guaranteed loans amounting to around US$2bn came to light. Unable to service its debt burden, the country currently finds itself in a precarious financial position. However, with the recent signing of the US$8bn Coral South Offshore Floating Liquefied Natural Gas (FLNG) Project, which positions Mozambique to become the world’s fourth-largest exporter of Liquefied Natural Gas (LNG) by 2022, many analysts predict that the Mozambican economy will rapidly rebound.

    Strengths

    • Mozambique’s construction sector has experienced robust growth in recent years.
    • Numerous established international companies are represented in the Mozambican market through their local or regional subsidiaries.
    • The construction industry serves all sectors of the economy.
    • The industry is a key driver of socio-economic development, providing shelter, basic services, transport networks and other infrastructure.
    • The sector is labour-intensive and creates multiple employment opportunities.

    Weaknesses

    • Operational costs are high and it is frequently difficult to procure construction materials and equipment.
    • R&D activity is limited and there is little innovation.
    • The country’s communications and technology network is poorly developed.
    • The country’s credit market is underdeveloped and it is difficult to procure mortgage and construction loans.
    • The operating environment is characterised by bureaucratic inefficiencies, corruption and an apparent lack of resolve to enforce regulations.
    • There is a shortage of skilled labour and productivity is low.

    Opportunities

    • Demand for high-end housing is high and is expected to rise further.
    • Market demand for low-cost, energy-efficient housing, creates opportunities for new innovations and product lines such as SIPs.
    • Rising urbanisation presents building and construction opportunities.
    • The development of Mozambique into a major LNG producer is expected to fuel the construction boom.
    • The diversification of the Mozambican economy presents many new opportunities for contractors.
    • The emerging middle class is driving demand across a multitude of sectors.
    • With the implementation of the Paris Agreement on Climate Change and the 2030 Agenda for Sustainable Development, renewable energy projects are expected to attract greater investment.

    Threats

    •  External global pressures, including the slowing of growth in both the developed and emerging market economies, which could result in lower levels of investment.
    • Corruption and tender fraud.
    • Decline in commodity prices.
    • Domestic macroeconomic pressures.
    • Funding shortfalls and delays in the implementation of infrastructure projects.
    • Geopolitical tensions and the rising threat of conflict on the Korean Peninsula.
    • The delayed implementation of large projects and/or the failure to implement proposed public sector infrastructure development projects.
    • The resurgence of political hostilities.

    Outlook

    Fallout from the Mozambican government’s “secret” debt scandal has been partially offset by the recent announcement made by Renamo’s Afonso Dhlakama that the rebel movement has agreed to extend its December 2016 ceasefire indefinitely. The truce is widely expected to strengthen the position of President Filipe Nyusi, as he endeavours to rebuild confidence in his beleaguered administration. Positive developments in the country’s mining and energy sectors are also expected to restore investor confidence. However, economists say that considerable political resolve will be required to implement the restrictive fiscal and monetary policies recommended by the IMF. Although economic growth is expected to remain relatively constrained in the short-term, the IMF predicts that the Mozambican economy will expand by 4.7% in 2017. Going forward, the World Bank forecasts that the economy will regain momentum, with GDP growth of around 6.6% and 6.7% projected for 2018 and 2019 respectively. With Mozambique poised to become a major LNG producer, stakeholders are generally positive about the future prospects of the country’s construction sector.

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    The Construction Industry in Mozambique 2017

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 2
    2.2. Geographic Position 3
    3. SIZE OF THE INDUSTRY 6
    4. STATE OF THE INDUSTRY 16
    4.1. Local 16
    4.1.1. Corporate Actions 27
    4.1.2. Regulations and Government Policies 27
    4.2. Continental 29
    4.3. International 33
    5. INFLUENCING FACTORS 35
    5.1. Economic Environment 35
    5.2. Socio-Political and Socio-Economic Environment 38
    5.3. Infrastructure Deficit 39
    5.3.1. Government Infrastructure Programme Spend 39
    5.3.2. Foreign Direct Investment (FDI) 40
    5.3.3. Private Sector Investment 40
    5.3.4. Public-Private Partnerships (PPPs) 40
    5.4. Urbanisation 41
    5.5. Local Content 41
    5.6. Corruption 42
    5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 42
    5.8. Input Costs 43
    5.9. Cyclicality 43
    5.10. Health and Safety Concerns 44
    5.11. Technology, Research and Development (R&D) and Innovation 44
    5.12. Labour 47
    5.13. Environmental Concerns 49
    6. COMPETITION 51
    6.1. Barriers to Entry 52
    6.2. Public Procurement and the Tendering Process 53
    7. SWOT ANALYSIS 53
    8. OUTLOOK 54
    9. INDUSTRY ASSOCIATIONS 55
    10. REFERENCES 55
    10.1. Publications 55
    10.2. Websites 57
    APPENDIX 1 59
    Investment Opportunities in the Mozambican Tourism Sector 59
    APPENDIX 2 64
    The Global Competitiveness Index 2016-2017: Mozambique 64
    COMPANY PROFILES 65
    AECOM 65
    ANHUI FOREIGN ECONOMIC CONSTRUCTION (GROUP) CO LTD 70
    AURECON MOZAMBIQUE LDA 71
    AVENG MOZAMBIQUE LDA 73
    BECHTEL CORPORATION 75
    CAMARGO CORREA MOZAMBIQUE LDA 77
    CETA CONSTRUCAO E SERVICOS SA 79
    CHICAGO BRIDGE & IRON CO NV 81
    CHINA ROAD & BRIDGE CORPORATION 86
    CHIYODA CORPORATION 87
    CLM CIVIL CONTRACTORS MOZAMBIQUE LDA 91
    CMC AFRICA AUSTRAL LDA 93
    CONSTRUCOES JJR & FILHOS MOZAMBIQUES LDA 95
    GABRIEL COUTO MOZAMBIQUE SARL 97
    INGEROP MOZAMBIQUE LDA 99
    ITALIAN-THAI DEVELOPMENT PUBLIC COMPANY LTD 101
    KENTZ ENGINEERS & CONSTRUCTORS LDA 106
    MOTA-ENGIL ENGENHARIA E CONSTRUCAO SA 108
    MURRAY AND ROBERTS HOLDINGS LTD 110
    NCC MOZAMBIQUE LDA 114
    ODEBRECHT SA 116
    OPWAY ENGENHARIA SOCIEDADE DE CONSTRUCOES MOZAMBIQUE 119
    PENTA-OCEAN CONSTRUCTION CO LTD 121
    PROCONSTROI MOZAMBIQUE LDA 125
    SAIPEM SPA 127
    SOARES DA COSTA MOZAMBIQUE SARL 132
    STEFANUTTI STOCKS MOZAMBIQUE LDA 134
    VM CONSTRUCTION 136
    WILSON BAYLY HOLMES-OVCON LTD 137

    Introduction

    This report focuses on the building and construction sector in the Republic of Mozambique. The former Portuguese colony, which, in June 2015, celebrated 40 years of independence, currently finds itself in the midst of a renaissance as it endeavours to rebuild its battle-scarred economy. In recent years, positive political and economic reforms, boosted by the discovery of prolific quantities of natural gas, have seen Mozambique emerge as an increasingly attractive investment destination. While admittedly coming off an extremely low base, the resource-rich country is one of the fastest growing frontier economies on the African continent. Indeed, sustained levels of strong Gross Domestic Product (GDP) growth suggest that one of Africa’s "sleeping giants" is on the rise. With an estimated value of approximately US$600m, the Mozambican construction sector is small and underdeveloped by global standards. However, the industry plays a pivotal role in the country, as it supports all sectors of the local economy and is one of the main drivers of economic expansion and job creation. Infrastructure development, with a particular focus on the country’s burgeoning extractive and real estate industries, has been prioritised. With projects totalling almost US$30bn in the pipeline or in the process of being rolled out, business in the construction sector is booming.

    Strengths

    • FDI capital investment inflows remain robust.
    • The construction industry serves all sectors of the Mozambican economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
    • The industry encourages small business development.
    • The industry’s major players are well-established companies.
    • The sector has delivered a strong performance over the past five years. Its order books are healthy and it is on a sustainable growth path.

    Weaknesses

    • Operational costs are high and it is difficult to procure construction materials and equipment.
    • R&D activity is limited and there is little innovation.
    • The country’s communications and technology network is poorly developed.
    • The country’s credit market is underdeveloped and it is difficult to procure mortgage and construction loans.
    • The operating environment is characterised by bureaucratic inefficiencies, corruption and an apparent lack of resolve to enforce regulations.
    • There is a shortage of skilled manpower and productivity is low.

    Opportunities

    • Demand for high-end housing is high and is expected to rise further.
    • Market demand for low-cost, energy-efficient housing, creates opportunities for new innovations and product lines such as SIPs.
    • Rising urbanisation presents construction opportunities.
    • The diversification of the Mozambican economy presents many new opportunities for contractors, with the development of Mozambique into a major LNG producer continuing to fuel the construction boom.
    • The emerging middle class is driving demand across a multitude of sectors.
    • The Mozambican government has prioritised infrastructure development.

    Threats

    • An escalation of political tensions.
    • Continued weakness of commodity prices.
    • Domestic and/or global recessionary pressures.
    • Funding shortfalls and delays in the implementation of infrastructure projects.
    • Sustained exchange rate volatility.
    • The high level of corruption and tender fraud.
    • The weakening of the rule of law.

    Outlook

    Construction Industry Forecast Mozambique’s construction sector is predicted to sustain growth of around 10% until 2016. Barring the occurrence of any major event that could derail the country’s positive growth momentum, stakeholders generally remain confident that the construction boom is set to continue. However, given the government’s resolve to tighten public expenditure, measures will need to be implemented to promote the development of a sustainable and stable investment climate. Notwithstanding the prevailing weakness of commodity prices, coupled with China’s economic woes, most analysts remain positive that Mozambique will continue to attract significant foreign capital investment inflows. Although investment will continue to be driven by the country’s extractive industries, demand for residential, commercial and retail property is expected to remain high. Macroeconomic Outlook The IMF remains confident that Mozambique will continue on a robust path of economic expansion and diversification. While the country has successfully restricted inflation within its target range, sustained strong economic growth and increased foreign capital investment inflows, the IMF reiterates that greater exchange rate flexibility, strong liquidity management, as well as fiscal adjustment are imperative for the preservation of macroeconomic stability. Although foreign donor aid is expected to decline over the medium term, foreign capital investment is expected to rise. According to IMF projections, investments in the oil and gas sector over the next ten years could reach US$100bn. Political Outlook Renamo’s repeated calls for the establishment of an independent "Republic of the Centre and North" have dampened investor confidence. Moreover, numerous contractors are reluctant to operate in Renamo strongholds due to security concerns. While many political analysts have dismissed the renewed sabre-rattling of Renamo leader, Afonso Dhlakama as “hot air”, others have warned that a resurgence of low-intensity conflict would derail the country.

    The Construction Industry in Mozambique 2015

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    The Construction Industry in Mozambique 2015-03-04

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION 1
    2.1. Supply Chain 2
    2.2. Geographic Position 3
    2.2.1. Key Cities and Regions 4
    3. SIZE OF THE INDUSTRY 5
    3.1. Key Indigenous and Foreign Players 6
    4. STATE OF THE INDUSTRY 18
    4.1. Local 18
    4.1.1. Corporate Actions 21
    4.1.2. Regulations 22
    4.1.3. Opportunities for the Construction Industry 23
    4.1.3.1. Transport 24
    4.1.3.2. Energy/Power 28
    4.1.3.3. Water Supply and Treatment 29
    4.1.3.4. Healthcare 30
    4.1.3.5. Education 30
    4.1.3.6. Telecommunications 31
    4.1.3.7. Residential Building 31
    4.1.3.8. Commercial 32
    4.1.3.9. Retail 33
    4.1.3.10. Hotels and Tourism 33
    4.1.3.11. Mining and Industrial 34
    4.2. Continental 35
    4.3. International 39
    5. INFLUENCING FACTORS 41
    5.1. Economic Environment 41
    5.1.1. General 41
    5.1.2. Effects on the Construction Sector 44
    5.2. Socio-Political and Socio-Economic Environment 44
    5.3. Infrastructure Deficit 45
    5.3.1. Government Infrastructure Programme Spend 46
    5.3.2. Foreign Direct Investment (FDI) 46
    5.3.3. Private Sector Investment 46
    5.3.4. Public-Private Partnerships 47
    5.4. Urbanisation 47
    5.5. Local Content 47
    5.6. Corruption 48
    5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 48
    5.8. Input Costs 50
    5.9. Cyclicality 51
    5.10. Health and Safety Concerns 51
    5.11. Technology 51
    5.12. Labour Resources 52
    5.12.1. Training and Skills Development 53
    5.12.2. Licensing 53
    5.12.3. Skills Shortages 53
    5.12.4. Opportunities for Foreign Professionals 54
    5.13. Environmental Concerns 54
    6. COMPETITION 56
    6.1. Barriers to Entry 56
    6.2. Public Procurement and the Tendering Process 57
    6.3. Research & Development (R&D) and Innovation 57
    6.3.1. Research and Development (R&D) 57
    6.3.2. Innovation 58
    7. SWOT ANALYSIS 59
    8. OUTLOOK 60
    8.1. Construction Industry Forecast 60
    8.2. Macroeconomic Outlook 60
    8.3. Political Outlook 60
    9. INDUSTRY ASSOCIATIONS 61
    10. REFERENCES 61
    10.1. Publications 61
    10.2. Websites 62
    APPENDIX 1 64
    Investment Opportunities in the Mozambican Construction Sector 64
    COMPANY PROFILES 66
    AECOM TECHNOLOGY CORPORATION 66
    ANHUI FOREIGN ECONOMIC CONSTRUCTION (GROUP) CO LTD 69
    AURECON MOZAMBIQUE LDA 70
    AVENG GRINAKER-LTA MOZAMBIQUE LDA 72
    BASIL READ HOLDINGS LTD 74
    BECHTEL CORPORATION 81
    BRITALAR - SOCIEDADE DE CONSTRUCOES SA 83
    CAMARGO CORREA MOZAMBIQUE LDA 84
    CETA CONSTRUCAO E SERVICOS SA 86
    CHINA ROAD & BRIDGE CORPORATION 88
    CLM CIVIL CONTRACTORS MOZAMBIQUE LDA 90
    CMC AFRICA AUSTRAL LDA 92
    CONSTRUCOES JJR & FILHOS MOZAMBIQUES LDA 94
    GABRIEL COUTO MOZAMBIQUE SARL 96
    INGEROP MOZAMBIQUE LDA 98
    ITALIAN-THAI DEVELOPMENT PUBLIC COMPANY LTD 100
    KENTZ ENGINEERS & CONSTRUCTORS LDA 105
    MOTA-ENGIL ENGENHARIA E CONSTRUCAO SA 107
    MURRAY & ROBERTS HOLDINGS LTD 109
    NCC MOZAMBIQUE LDA 113
    ODEBRECHT SA 115
    OPWAY ENGENHARIA SOCIEDADE DE CONSTRUCOES MOZAMBIQUE 117
    PENTA-OCEAN CONSTRUCTION CO LTD 119
    PROCONSTROI MOZAMBIQUE LDA 123
    SOARES DA COSTA MOZAMBIQUE SARL 125
    STEFANUTTI STOCKS MOZAMBIQUE LDA 127
    VM CONSTRUCTION 129
    WILSON BAYLY HOLMES-OVCON LTD 130

    Introduction

    This report focuses on the building and construction sector in the Republic of Mozambique. Although its contribution to the country’s Gross Domestic Product (GDP) is comparatively small relative to that of other nations, Mozambique’s US$600m construction industry is of immense strategic importance, as it supports all sectors of the economy. Following the discovery of prolific quantities of natural gas in Mozambique’s offshore Rovuma Basin, the resource-rich country - one of the world’s most underdeveloped – has become one of the fastest growing frontier economies on the African continent. Infrastructure development, with a particular focus on the country’s burgeoning energy and mining sectors, has been prioritised and projects totalling almost US$30bn are in the pipe-line. However, despite significant interest in the investment and business opportunities available in Mozambique, investor confidence has recently been rattled by post-election tensions, which culminated in a belligerent declaration by the leader of Resistência Nacional de Moçambique (Renamo) that the former rebel movement intended to establish a separatist republic incorporating Mozambique’s central and northern provinces.

    Strengths

    • FDI inflows remain robust.
    • The construction industry is the beneficiary of large public sector projects.
    • The construction industry serves all sectors of the Mozambican economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
    • The sector has delivered a strong performance over the past five years. Its order books are healthy and it is on a sustainable growth path.

    Weaknesses

    • Operational costs are high and it is difficult to procure construction materials and equipment.
    • R&D activity is limited and there is little innovation.
    • The country’s communications and technology network is poorly developed.
    • The operating environment is characterised by bureaucratic inefficiencies, corruption and an apparent lack of resolve to enforce regulations.
    • There is a shortage of skilled manpower and productivity is low.

    Opportunities

    • Rising urbanisation presents construction opportunities.
    • The diversification of the Mozambican economy presents many new opportunities for contractors, with the development of Mozambique into a major LNG producer continuing to fuel the construction boom.
    • The emerging middle class is driving demand across a multitude of sectors.
    • The Mozambican government has prioritised infrastructure development.

    Threats

    • An escalation of political tensions.
    • Falling commodity prices.
    • Funding shortfalls and delays in the implementation of infrastructure projects.
    • Health risks, notably HIV/AIDS, tuberculosis and malaria.
    • The high level corruption and tender fraud.
    • The weakening of the rule of law.

    Outlook

    Construction Industry Forecast Investment in Mozambique’s infrastructure sector will continue to be driven by the extractive industries. Analysts forecast that the sector will remain robust, given the healthy state of its order books. Foreign dominance in the infrastructure sector is set to continue, with Chinese companies steadily expanding their sphere of influence. Growth in the residential, commercial, retail, hospitality and industrial segments is expected to provide excellent opportunities for both indigenous and foreign companies operating in the Mozambican construction sector. Macroeconomic Outlook Mozambique’s 2015 budget focuses on restoring prudent fiscal management and is less expansionary than in previous years. Although the January 2015 flood-damage has exacted a heavy toll on the country, the economy is expected to maintain its growth momentum in the short-term. Key structural reforms proposed by the IMF include the following:
    • Enhancing the country’s overall tax administration;
    • Reforming public financial management systems;
    • Strengthening capacity for transparent public investment management and borrowing;
    • Improving the business environment;
    • The development of the financial sector;
    • The preservation of debt sustainability and macroeconomic stability. Foreign aid is expected to decline over the medium term. However, Mozambique’s macroeconomic outlook is forecast to remain positive in the medium term, with analysts predicting broad-based economic growth and low inflation. Political Outlook Post-election political tensions remain high across Mozambique, particularly in Renamo strongholds located in the central and northern regions of the country. Although President Filipe Nyusi successfully defused a political crisis shortly after his inauguration, analysts caution that further sabre-rattling would not be unexpected. They warn that the creation of an autonomous "Republic of the Centre and North", as proposed by Renamo leader, Afonso Dhlakama, would be disastrous for the nation.

    The Construction Industry in Mozambique 2015

    Full Report

    R 1 900.00(ZAR) estimated $98.97 (USD)*

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    Industry Landscape

    R 1 330.00(ZAR) estimated $ 69.28 (USD)*

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    Historical Reports

    The Construction Industry in Mozambique 2017-08-10

    R 1 900.00(ZAR) estimated $98.97 (USD)*

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    The Construction Industry in Mozambique 2015-09-21

    R 1 900.00(ZAR) estimated $98.97 (USD)*

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    The Construction Industry in Mozambique 2014-09-22

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Supply Chain 2
    2.2. Geographic Position 3
    2.2.1. Key Cities and Regions 4
    3. SIZE OF THE INDUSTRY 5
    3.1. Key Indigenous and Foreign Players 6
    4. STATE OF THE INDUSTRY 18
    4.1. Local 18
    4.1.1. Corporate Actions 20
    4.1.2. Regulations 21
    4.1.3. Opportunities for the Construction Industry 22
    4.1.3.1. Transport 23
    4.1.3.2. Energy/Power 26
    4.1.3.3. Water Supply and Treatment 27
    4.1.3.4. Healthcare 27
    4.1.3.5. Education 28
    4.1.3.6. Telecommunications 28
    4.1.3.7. Residential Building 28
    4.1.3.8. Commercial 29
    4.1.3.9. Retail 29
    4.1.3.10. Hotels and Tourism 30
    4.1.3.11. Mining and Industrial 30
    4.2. Continental 31
    4.3. International 33
    5. INFLUENCING FACTORS 34
    5.1. Economic Environment 34
    5.1.1. General 34
    5.1.2. Effects on the Construction Sector 36
    5.2. Socio-Political Environment 37
    5.3. Infrastructure Deficit 38
    5.3.1. Government Infrastructure Programme Spend 38
    5.3.2. Foreign Direct Investment (FDI) 38
    5.3.3. Private Sector Investment 38
    5.3.4. Public-Private Partnerships 39
    5.4. Urbanisation 39
    5.5. Local Content 40
    5.6. Corruption 40
    5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply 41
    5.8. Input Costs 42
    5.9. Cyclicality 42
    5.10. Health and Safety Concerns 42
    5.11. Technology 43
    5.12. Labour Resources 44
    5.12.1. Training and Skills Development 44
    5.12.2. Licensing 44
    5.12.3. Skills Shortages 45
    5.12.4. Opportunities for Foreign Professionals 45
    5.13. Environmental Concerns 45
    6. COMPETITION 47
    6.1. Barriers to Entry 47
    6.2. Public Procurement and the Tendering Process 48
    6.3. Research & Development (R&D) and Innovation 48
    6.3.1. Research and Development (R&D) 48
    6.3.2. Innovation 49
    7. SWOT ANALYSIS 50
    8. OUTLOOK 50
    8.1. Construction Industry Forecast 50
    8.2. Macroeconomic Outlook 51
    8.3. Political Outlook 51
    9. INDUSTRY ASSOCIATIONS 52
    10. REFERENCES 52
    10.1. Publications 52
    10.2. Websites 53
    APPENDIX 1 54
    Investment Opportunities in the Mozambican Construction Sector 54
    COMPANY PROFILES 56
    AECOM TECHNOLOGY CORPORATION 56
    ANHUI FOREIGN ECONOMIC CONSTRUCTION (GROUP) CO LTD 59
    AURECON MOZAMBIQUE LDA 60
    AVENG GRINAKER-LTA MOZAMBIQUE LDA 62
    BASIL READ HOLDINGS LTD 64
    BECHTEL CORPORATION 70
    BRITALAR - SOCIEDADE DE CONSTRUCOES SA 72
    CAMARGO CORREA MOZAMBIQUE LDA 73
    CETA CONSTRUCAO E SERVICOS SA 75
    CHINA ROAD & BRIDGE CORPORATION 76
    CLM CIVIL CONTRACTORS MOZAMBIQUE LDA 78
    CMC AFRICA AUSTRAL LDA 80
    CONSTRUCOES JJR & FILHOS MOZAMBIQUES LDA 82
    GABRIEL COUTO MOZAMBIQUE SARL 84
    INGEROP MOZAMBIQUE LDA 86
    ITALIAN-THAI DEVELOPMENT PUBLIC COMPANY LTD 88
    KENTZ ENGINEERS & CONSTRUCTORS LDA 93
    MOTA-ENGIL ENGENHARIA E CONSTRUCAO SA 95
    MURRAY & ROBERTS HOLDINGS LTD 97
    NCC MOZAMBIQUE LDA 102
    ODEBRECHT SA 104
    OPWAY ENGENHARIA SOCIEDADE DE CONSTRUCOES MOZAMBIQUE 106
    PENTA-OCEAN CONSTRUCTION CO LTD 108
    PROCONSTROI MOZAMBIQUE LDA 112
    SOARES DA COSTA MOZAMBIQUE SARL 114
    STEFANUTTI STOCKS MOZAMBIQUE LDA 116
    VM CONSTRUCTION 118
    WILSON BAYLY HOLMES-OVCON LTD 120

    Introduction

    This report focuses on the infrastructure sector in one of the world’s most underdeveloped countries, the Republic of Mozambique which has been devastated by 15 years of civil war. The unprecedented construction boom currently being experienced in the country is largely driven by a significant increase in the country’s coal mining output, coupled with substantial off-shore discoveries of natural gas, which could see Mozambique emerging as the third largest exporter of Liquefied Natural Gas (LNG) in the world. With an estimated value of US$500m, the Mozambican construction industry is a pillar of the country’s economy and has a strategic role to fulfil in rebuilding the nation. Infrastructure development, with a particular focus on the country’s burgeoning energy and mining sectors, has been fast-tracked and projects totalling almost US$30bn have broken ground, or are in the planning stages. The recent signing of a peace accord between the ruling Frente de Libertação de Moçambique (Frelimo) and Resistência Nacional de Moçambique (Renamo) has eased political tensions and boosted investor confidence in the country. The agreement paves the way for the leader of the rebel movement, Afonso Dhlakama, to stand as a candidate in Mozambique’s presidential elections that are scheduled to take place on 15 October 2014.

    Strengths

    • FDI inflows are robust.
    • The construction industry is the beneficiary of large public sector projects.
    • The construction industry serves all sectors of the Mozambican economy and is a key driver of socio-economic development, providing shelter, employment and infrastructural development.
    • The sector has delivered a strong performance over the past five years. Its order books are healthy and it is on a sustainable growth path.

    Weaknesses

    • Lack of skilled manpower and productivity is low.
    • Operational costs are high and it is difficult to procure construction materials and equipment.
    • Poorly developed communications and technology network.
    • R&D activity is limited and there is little innovation.
    • The operating environment is characterised by bureaucratic inefficiencies, corruption and an apparent lack of resolve to enforce regulations.

    Opportunities

    • Rising urbanisation presents construction opportunities.
    • The development of Mozambique into a major LNG producer will continue to fuel the construction boom.
    • The diversification of the Mozambican economy presents many new opportunities.
    • The emerging middle class is driving demand across a multitude of sectors.
    • The Mozambican government has prioritised infrastructure development and has increased capital expenditure in its 2014 Budget.

    Threats

    • Delays in the implementation of infrastructure projects.
    • Falling commodity prices.
    • Health risks, notably HIV/AIDS, tuberculosis and malaria.
    • High level corruption and tender fraud.
    • Lack of respect for the rule of law.
    • The escalation of political tensions and sectarian violence.

    Outlook

    During the past decade, the Mozambican construction sector has established a strong foundation and has emerged as a pillar of the nation’s ‘frontier’ economy. Stakeholders believe that the robust performance that the industry has delivered over the past five years is set to continue, given the healthy state of its order books. The Mozambican government has prioritised infrastructure development and opportunities are plentiful across all sectors. Analysts believe that foreign construction companies will continue to handle high-value projects, with Chinese companies steadily increasing their dominance in the market. It is anticipated that medium-sized companies will increasingly take up opportunities in the burgeoning commercial, retail, hospitality and industrial segments, while local indigenous contractors will continue to focus on lower-value construction projects. Spin-offs from the burgeoning energy and mining sectors appear likely to provide excellent opportunities for both indigenous and foreign companies operating in the construction sector.

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. SIZE AND STRUCTURE OF THE INDUSTRY 1
    2.1. Geographic Position 1
    2.1.1. Key Cities and Regions 2
    2.2. Size of the Industry 2
    2.2.1. Key Indigenous and Foreign Players 2
    3. STATE OF THE INDUSTRY 8
    3.1. Local 8
    3.1.1. Corporate Actions 9
    3.1.2. Regulations 10
    3.1.3. Opportunities for the Construction Industry 10
    3.1.3.1. Transport 10
    3.1.3.2. Energy/Power 12
    3.1.3.3. Water Supply and Treatment 12
    3.1.3.4. Healthcare 13
    3.1.3.5. Education 13
    3.1.3.6. Telecommunications 13
    3.1.3.7. Residential Building 13
    3.1.3.8. Commercial 13
    3.1.3.9. Retail 14
    3.1.3.10. Hotels and Tourism 14
    3.1.3.11. Mining and Industrial 14
    3.2. Continental 14
    3.3. International 15
    4. INFLUENCING FACTORS 16
    4.1. Economic Environment 16
    4.1.1. General 16
    4.1.2. Effects on the Construction Sector 17
    4.2. Socio-Political Environment 17
    4.3. Infrastructure Deficit 18
    4.3.1. Government Infrastructure Programme Spend 18
    4.3.2. Foreign Direct Investment (FDI) 18
    4.3.3. Private Sector Investment 18
    4.3.4. Public-Private Partnerships (PPP) 19
    4.4. Urbanisation 19
    4.5. Local Content 19
    4.6. Corruption 19
    4.7. Industry Supply Chain 19
    4.7.1. Capacity, Quality and Security of Supply 19
    4.8. Industry Specific Issues 20
    4.8.1. General Trends 20
    4.8.2. Input Costs 20
    4.8.3. Cyclicality 20
    4.8.4. Health and Safety 20
    4.9. Competition 21
    4.9.1. Barriers to Entry 21
    4.9.2. Public Procurement and the Tendering Process 21
    4.10. Labour Resources 21
    4.10.1. Training and Skills Development 21
    4.10.2. Licensing 22
    4.10.3. Skills Shortages 22
    4.10.4. Opportunities for Foreign Professionals 22
    4.11. Technology, Research & Development (R&D) and Innovation 22
    4.11.1. Technology 22
    4.11.2. Research and Development (R&D) 23
    4.11.3. Innovation 23
    4.12. Environmental Concerns 23
    5. SWOT ANALYSIS 24
    6. OUTLOOK 24
    6.1. Construction Industry Forecast 24
    6.2. Macroeconomic Outlook 24
    6.3. Political Outlook 25
    7. INDUSTRY ASSOCIATIONS 25
    8. REFERENCES 25
    8.1. Publications 25
    8.2. Websites 25
    APPENDIX 1 27
    Investment Opportunities In The Mozambican Construction Sector 27
    COMPANY PROFILES 28
    AECOM TECHNOLOGY CORPORATION 28
    ANHUI FOREIGN ECONOMIC CONSTRUCTION (GROUP) CO LTD 30
    AURECON MOZAMBIQUE LDA 31
    AVENG GRINAKER-LTA MOZAMBIQUE LDA 32
    BASIL READ HOLDINGS LTD 33
    BECHTEL CORPORATION 37
    BRITALAR - SOCIEDADE DE CONSTRUCOES SA 38
    CAMARGO CORREA MOZAMBIQUE LDA 39
    CETA CONSTRUCAO E SERVICOS SA 40
    CHINA ROAD & BRIDGE CORPORATION 41
    CLM CIVIL CONTRACTORS MOZAMBIQUE LDA 42
    CMC AFRICA AUSTRAL LDA 43
    CONSTRUCOES JJR & FILHOS MOZAMBIQUES LDA 44
    GABRIEL COUTO MOZAMBIQUE SARL 45
    INGEROP MOZAMBIQUE LDA 46
    ITALIAN-THAI DEVELOPMENT PUBLIC COMPANY LTD 47
    KENTZ ENGINEERS & CONSTRUCTORS LDA 50
    MOTA-ENGIL ENGENHARIA E CONSTRUCAO SA 51
    MURRAY & ROBERTS HOLDINGS LTD 52
    NCC MOZAMBIQUE LDA 55
    ODEBRECHT SA 56
    OPWAY ENGENHARIA SOCIEDADE DE CONSTRUCOES MOZAMBIQUE 58
    PENTA-OCEAN CONSTRUCTION CO LTD 59
    PROCONSTROI MOZAMBIQUE LDA 62
    SOARES DA COSTA MOZAMBIQUE SARL 63
    STEFANUTTI STOCKS MOZAMBIQUE LDA 64
    VM CONSTRUCTION 65
    WILSON BAYLY HOLMES-OVCON LTD 66

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