Unique approach that is paying dividends in Africa

The rapid expansion of Henan Guoji Group in Africa is due to its unique way of doing business, according to one of its bosses.

Guan Tingzhong, managing director of Henan Guoji Investment Company Ltd (Zambia), an investment arm of the group, believes the secret of business success in Africa is making friends first.

The group began exploring markets outside China in 2001 when its overseas business department bagged its first machinery deal with the South Sudan government, giving it confidence to venture further.

In 2003, it set up Henan Guoji Industry and Development Co Ltd to further strengthen its international investment. In November that year it signed a memorandum of understanding with the Ministry of Trade and Industry of Sierra Leone to cooperate on and construct the Industry and Trade Zone. In February 2004, it set up Sierra Leone Guoji Investment and Development Co Ltd to manage the zone.

During its construction, the company targeted businesses that wished to expand business in African countries. It tailored facilities in the park to entice them so that, soon after the completion of the construction, companies moved in immediately.

After about a year's efforts, a brand new zone was open for operation in April 2005. It consists of five parts - production processing zone, commodity displaying zone, bonded zone, comprehensive office zone and leisure life zone. It is a comprehensive industrial park with integrated production, supply, warehouse, logistics, trade and service.

The zone is 500 meters from the country's only deep-water port and located at an intersection of a highway and an urban road, laying a solid foundation for light industrial production, trade and logistics, and enterprise investment. To date, 17 enterprises have moved in. Among them, 13 are China-funded enterprises (six from its home province of Henan) and four are foreign-invested enterprises.

In the following years, Henan Guoji invested and established trade exchanges with African countries such as Guinea, Mozambique, Zambia, Malawi, Uganda, Tanzania, Zimbabwe, Congo-Kinshasa and Cote d'Ivoire.

In Zambia, Guan was also general manager of ZDA-Henan Guoji Development CoLtd, a partnership between Henan Guoji and Zambia Development Agency, a government agency that promotes trade and investment. While developing a residential housing project in 2011, he and his team caught the agency's attention and the joint company was formed soon after to develop houses for government employees.

"ZDA is well aware of how much experience we have in real estate development and, as an investment promotion agency, ZDA is highly influential," Guan says. "So we both win out of this."

The company is now working on a $50 million project to develop 1,000 houses for government employees, near the airport of the capital, Lusaka.

Guan says the way for the company to grow is to find reliable local partners.

"Profit is important, but if you want to make your company big, you have to think of win-win cooperation," says Guan." On the basis of a win-win situation, we are willing to share more of the profits with our local partners."

The Ideal City Intaka project is Henan Guoji's first project in Mozambique. It is a comprehensive project integrating residential homes, a commercial center and public facilities. It is listed as a major project in the five-year outline of Mozambique.

The project covers an area of 319 hectares. The plan is for 5,000 houses, 20,000 square meters of commercial facilities and another 10,000 sq m of comprehensive facilities with a total investment of more than $200 million.

To date, the project has accumulated investment of more than $100 million, carried out more than 120,000 sq m of construction and become the largest real estate project in Mozambique.

Between 2013 and 2015, Henan Guoji cooperated with Zhengzhou University and Henan University to launch the "Guoji Class" and sponsored outstanding university graduates from countries including Sierra Leone for two years of training in China to study Chinese language and culture. Upon graduation, the trainees will return to their home country to work on the Guoji projects.

panzhongming@chinadaily.com.cn

(China Daily Africa Weekly 06/23/2017 page26)