AVIC works to make Africa soar
AVIC International has been in Africa for 30 years and has diversified its businesses there to include infrastructure and livelihood projects.
The Chinese giant with roots in aviation is looking to help the continent with its technology advantages
Energy shortages and the lack of technical training in Africa are two problems that are dragging down the continent's ability to take off industrially. Both areas are being addressed by China's AVIC International Holding Corp.
Liu Jun, executive vice-president of the State-owned firm, talked about the company's plans in an interview with China Daily at the New York Forum Africa, which was held in Libreville, Gabon, in August.
Liu said that the company will make it a priority to help the African countries better prepare to receive industrial capacity transfers from China, which is seen as an important way to boost growth in Africa.
AVIC International is well-equipped to handle the challenges ahead.
It has more than 80,000 employees in more than 180 countries and regions, and is controlled by the giant Aviation Industry Corp of China, an aerospace and defense company.
AVIC has been in Africa for 30 years and has diversified its businesses there to include infrastructure and livelihood projects.
China has gained experience and developed high-end technology, Liu said.
However, considering the high cost and the lack of support from African governments, he said it is still challenging to promote new energy in the continent.
Major power cuts are still happening in some African nations due to shortages, but power is a must for the development of these countries, and making industry transfers from China is a practicable solution.
"Power to those countries is just like blood to human bodies. It will make those countries energetic," he said.
"Not only does China have advanced technology in the energy industry, including coal-fired and gas power generation, but it also has lots of experience and great capability in manufacturing and operations.
"If our capability is used here in Africa, it would have excellent opportunities to develop," Liu added.
The competitiveness of China's power generation industry is shown by AVIC Inter-national's participation in an engineering, procurement and construction project in Turkey to build two 600,000 kilowatt power units, he said.
The two units are now up and running and have yielded excellent profit for the owner.
The company is now preparing to invest in the energy industry in Turkey instead of being involved only in an EPC project.
With approval from Turkey's government, the company plans to work with China Power Investment Corp and a Turkish partner to build two 600,000 kW power units. The total amount of investment may reach $1.4 billion, he said.
The company is now hoping to replicate this experience in Africa. "We tried several times in Kenya to bid for coal-fired and gas power generation projects two years ago," Liu said.
"The bids are still in process. We have done market research into hydropower and coal-fired power in Zambia, gas power in Gabon and Egypt, and oil-fired power and gas power in Ghana."
While many banks are willing to offer financial support for those projects because of good design and economic feasibility, the company can also obtain strong support from China Exim Bank's concessional loan and preferential export buyer's credit.
Liu pointed out that the development of new energy in Africa is still restricted by cost, though his company is prepared for that.
"Actually, we have done some new-energy projects in Europe and the United States. It's government subsidies that make those new-energy projects there practicable," he said.
"In Africa, however, many governments are still drafting a subsidy policy for new energy, so we are still observing the market. New energy could be quite prosperous if African governments had clear policies."
While energy can be a problem for many Chinese companies in Africa, a lack of talent can be another hindrance. There is a large population in Africa, but very limited talent, making technical and vocational education and training urgent as well as necessary.
"The population in Africa is increasing, but there is a big problem as many youths are unemployed and lack skills to make a living," said Liu.
"Since (vocational training) is seriously needed ... this offers a good business opportunity to AVIC International.
"We have training contracts in about six African countries, including Kenya, Gabon, Zambia and Uganda. We bring into consideration both different countries' developmental orientation and the skilled labor Chinese companies there need, and design different training programs accordingly."
In Gabon, for example, AVIC International has set up not only machining and electronic training programs, but also training programs for the country's petroleum and timber industries.
The company also rolled out aeronautical maintenance training programs to fuel the country's hope of becoming a regional aviation hub.
Civil engineering programs are expected to help relieve Chinese companies' problems with the shortage of talented employees for their infrastructure projects, Liu said.
In Kenya, the company has launched Africa Technical Challenge, which aims to cultivate a spirit of entrepreneurship and facilitate self-employment among young people.
Winners were awarded cash last year, but the three outstanding participants also received scholarships to study at engineering universities in China.
As for the top two teams, they signed a spare parts manufacturing contract worth $100,000.
Liu said the spare parts the top two teams made will be used in the company's equipment in Kenya, so as to encourage young people to obtain more skills and find their professional directions.
"We have gained some experience from Africa Technical Challenge and would like to promote the experience to more African countries," Liu said.
"While equipping young people with skills, which can be used in their work and promote their countries' development, our (training) program can also help the young lead a better life.
"This can sometimes be even more significant than the upgrading of the countries' hardware facilities," he said.
Energy shortages and the lack of technical training in Africa are two problems that are dragging down the continent's ability to take off industrially. Both areas are being addressed by China's AVIC International Holding Corp.
Liu Jun, executive vice-president of the State-owned firm, talked about the company's plans in an interview with China Daily at the New York Forum Africa, which was held in Libreville, Gabon, in August.
Liu said that the company will make it a priority to help the African countries better prepare to receive industrial capacity transfers from China, which is seen as an important way to boost growth in Africa.
AVIC International is well-equipped to handle the challenges ahead.
It has more than 80,000 employees in more than 180 countries and regions, and is controlled by the giant Aviation Industry Corp of China, an aerospace and defense company.
AVIC has been in Africa for 30 years and has diversified its businesses there to include infrastructure and livelihood projects.
China has gained experience and developed high-end technology, Liu said.
However, considering the high cost and the lack of support from African governments, he said it is still challenging to promote new energy in the continent.
Major power cuts are still happening in some African nations due to shortages, but power is a must for the development of these countries, and making industry transfers from China is a practicable solution.
"Power to those countries is just like blood to human bodies. It will make those countries energetic," he said.
"Not only does China have advanced technology in the energy industry, including coal-fired and gas power generation, but it also has lots of experience and great capability in manufacturing and operations.
"If our capability is used here in Africa, it would have excellent opportunities to develop," Liu added.
The competitiveness of China's power generation industry is shown by AVIC Inter-national's participation in an engineering, procurement and construction project in Turkey to build two 600,000 kilowatt power units, he said.
The two units are now up and running and have yielded excellent profit for the owner.
The company is now preparing to invest in the energy industry in Turkey instead of being involved only in an EPC project.
With approval from Turkey's government, the company plans to work with China Power Investment Corp and a Turkish partner to build two 600,000 kW power units. The total amount of investment may reach $1.4 billion, he said.
The company is now hoping to replicate this experience in Africa. "We tried several times in Kenya to bid for coal-fired and gas power generation projects two years ago," Liu said.
"The bids are still in process. We have done market research into hydropower and coal-fired power in Zambia, gas power in Gabon and Egypt, and oil-fired power and gas power in Ghana."
While many banks are willing to offer financial support for those projects because of good design and economic feasibility, the company can also obtain strong support from China Exim Bank's concessional loan and preferential export buyer's credit.
Liu pointed out that the development of new energy in Africa is still restricted by cost, though his company is prepared for that.
"Actually, we have done some new-energy projects in Europe and the United States. It's government subsidies that make those new-energy projects there practicable," he said.
"In Africa, however, many governments are still drafting a subsidy policy for new energy, so we are still observing the market. New energy could be quite prosperous if African governments had clear policies."
While energy can be a problem for many Chinese companies in Africa, a lack of talent can be another hindrance. There is a large population in Africa, but very limited talent, making technical and vocational education and training urgent as well as necessary.
"The population in Africa is increasing, but there is a big problem as many youths are unemployed and lack skills to make a living," said Liu.
"Since (vocational training) is seriously needed ... this offers a good business opportunity to AVIC International.
"We have training contracts in about six African countries, including Kenya, Gabon, Zambia and Uganda. We bring into consideration both different countries' developmental orientation and the skilled labor Chinese companies there need, and design different training programs accordingly."
In Gabon, for example, AVIC International has set up not only machining and electronic training programs, but also training programs for the country's petroleum and timber industries.
The company also rolled out aeronautical maintenance training programs to fuel the country's hope of becoming a regional aviation hub.
Civil engineering programs are expected to help relieve Chinese companies' problems with the shortage of talented employees for their infrastructure projects, Liu said.
In Kenya, the company has launched Africa Technical Challenge, which aims to cultivate a spirit of entrepreneurship and facilitate self-employment among young people.
Winners were awarded cash last year, but the three outstanding participants also received scholarships to study at engineering universities in China.
As for the top two teams, they signed a spare parts manufacturing contract worth $100,000.
Liu said the spare parts the top two teams made will be used in the company's equipment in Kenya, so as to encourage young people to obtain more skills and find their professional directions.
"We have gained some experience from Africa Technical Challenge and would like to promote the experience to more African countries," Liu said.
"While equipping young people with skills, which can be used in their work and promote their countries' development, our (training) program can also help the young lead a better life.
"This can sometimes be even more significant than the upgrading of the countries' hardware facilities," he said.
