Interview with Eric Kalala on the corridors used by logistic providers in Katanga and on the country’s customs tariffs on imports and exports.

Eric Kalala General Manager Bollore Africa Logistics

Eric Kalala General Manager Bollore Africa Logistics

Bolloré Africa Logistics is the leading integrated logistics network provider in Africa. Could we begin with a brief overview of the company’s overall structure?
As the leading integrated logistics network provider, Bolloré Africa Logistics is present in 45 countries on the African continent, has 250 subsidiaries and employs 25,000 people being the biggest private employer in Africa.

The company entered the DRC in 1953 and today is considered the major clearing agent in the country offering integrated support from our existing network of offices. Bolloré Africa Logistics succeeded in creating a tight logistics network in a country as vast as DRC and via our other african subsidiaries, with Whitehorse we operate a large fleet of trucks and are strengthening our anchorage in the copperbelt region. Specifically in Katanga, Bolloré Afria Logistics provides a broad range of logistics services from basic commodities storage to advanced supply chain solutions and we assist on all stages of the mine development process, from feasibility to construction, operation and ultimately ore export.

Although copper production in DRC increased 52% in 2013, mining companies are facing some challenges including insufficient power supply; tax increases and expected changes in the mining code legislation. How were Bolloré Africa Logistics RDC’s business activities affected during 2013 and the first half of 2014?
The challenges you mention continue to have, to some extent, an impact on the local mining industry. On the export front, the export of copper concentrate has decreased but has been replaced by the export of refined ore, as the province now has more refineries. In terms of volume, exporting the concentrate or the final product is the same and we therefore see more added value realized in the country production.

How well regulated is DRC’s tax regime when it comes to customs tariffs on imports and exports?
The DRC has recently implemented changes to its tax regime including customs tariffs on imports and exports and a code of excise duties. The new customs code provides numerous improvements including simplified customs procedures, payment facilities and special economic areas. A new value added tax (VAT) ratio of 16 percent also came into affect in January 2012 replacing the previous consumption tax (ICA). In terms of import tariffs, all the country’s tariffs are ad valorem and charged on costs, insurance and freight and there are also several taxes collected by different government agencies such as the customs authority (DGDA), the tax authority (DGI), provincial government. The fact that this part DRC is a landlocked country means that logistics providers need to be efficient in order to be able to work in our clients’ best interests and Bolloré Africa Logistics is at work to find new regulations within the customs code to reduce our clients’ overall transportation costs.

With regards to Katanga’s province infrastructure, have you seen developments lately that you believe will have a positive impact on the sector?
The authorities in Katanga are making important strides to improve the infrastructure in the province. Roads are improving, airport is being refurbished, and the road to Kolwezi has been paved. The main challenge remains the Kasumbalesa border which has requested the implication of congolese and zambian authorities. There have also been investments in the national railway company, SNCC with rolling equipment and rails now being imported and priority being given to refurbishing the much-awaited line between Lobito and Luau. The railway system could become a key driver of the transportation sector in DRC – however – for this to happen SNCC should adapt and scale its pricing system. Currently, we are therefore looking to enter into discussions with SNCC to find ways to incentivize logistics providers to utilize the railway system and reduce the overreliance on the road network.

What are the preferred corridors used by logistic providers in Katanga and what are the reasons for this choice?
There are 4 efficient corridors from the DRC and these are Walvis Bay in Namibia, Durban in South Africa, Dar-es-Salaam in Tanzania and Beira in Mozambique. Once the Benguela railway re-opens, the DRC will also benefit from the Lobito corridor, in Angola with cargo moving along the refurbished 1,344 km line linking Lobito with Luau. In terms of costs, the Dar es Salaam corridor is currently the most convenient but Bolloré Africa Logistics RDC utilizes the corridor in Durban, South Africa with our delivery times being of approximately 12 days. The reason for this choice is that the port in Durban is efficient; the procedures are set and the organisation is impeccable.

What is your vision for Bolloré Africa Logistics’s role in Katanga in the medium term?
In the medium term, Bolloré Africa Logistic’s aim in Katanga will consist in strengthening our leadership position within the logistics sector and we will continue to work to secure customs formalities according to the privileges of the mining code in total compliance with the applicable legislation. Bolloré Africa Logistics will also continue to make investments and expand in the country and our wider aim is to continue to grow our activities, both in Katanga and in other provinces, with more products and greater diversification across clients and sectors.