CAE: GOOD FOR ANGOLA AND FOR AMERICAN BUSINESSES

UNCLAS LUANDA 000757 SIPDIS SENSITIVE SIPDIS JOHANNESBURG AND CAPETOWN FOR FCS E.O. 12958: N/A TAGS: BEXP ETRD ECON AO SUBJECT: CAE: GOOD FOR ANGOLA AND FOR AMERICAN BUSINESSES ¶1. (U) Summary. The Angolan Center for Business Support (CAE),founded to help bridge the gap between Angolan small and medium sized enterprises and the oil industry, now includes support for American businesses entering the Angolan market. To Angolan SMEs it provides the full range of business development, capacity building and matchmaking services and instills in them norms of international transparency and business ethics. For US businesses, CAE can provide valuable information on business trends, opportunities for networking, and (soon) due diligence checks. End Summary. Background: Center for Business Support (CAE) -------------- ¶2. (U) According to Angolan law, the oil industry has a twenty percent local content requirement. Sonangol, BP, Chevron, Esso and Total hired the US-based Citizens Development Corps (CDC) to evaluate the oil sector's needs against the capacities of Angolan small and medium sized enterprises (SMEs). The study found two major gaps: supply and capacity. As a result, CDC formed the Center for Business Support (CAE) (www.caeangola.com) to strengthen capacity through the Supplier Initiative Program. ¶3. (U) CAE employs twelve people, including 3 Americans. Its main goal is to build the capacity of Angolan businesses to participate more actively and with greater success in the oil and gas industry. As of June 31, 2007, 29 contracts valued at more than $2.75M had been awarded to CAE clients; more than 75 new employees were hired by these clients; more than 375 companies have utilized CAE services; fourteen clients participated in foreign trade missions and more than 800 clients have participated in CAE training events. Company products and services range from those directly related to the petroleum industry to general service providers such as caterers and cleaners. In the near future, CAE intends to offer due diligence checks on Angolan companies on a fee basis to US or other companies. Capacity Building and Matchmaking -------------- ¶4. (U) CAE's primary mission is to assist Angolan SMEs but it can also help American businesses new to the Angolan market. CAE offers the following to US businesses: introductions to the oil companies, business trend reports, and links to a number of CAE-certified potential Angolan partners. The matches are beneficial to both sides - American companies looking to evaluate and/or start businesses in Angola can see proven models and American businesses can share know-how and contacts with local certified SMEs. ¶5. (U) CAE also offers training on health, safety, security, and environment (HSSE),bids and contracts, ethics, financial management, supply chain management, human resources, marketing and communications, business plans, and quality management systems in five locations (Luanda, Benguela, Soyo, Zaire, and Cabinda). Consultants work individually with local client companies to improve their managerial efficiency, the quality of service delivery, and perform due diligence. Recognizing that access to financing is one of the biggest challenges facing Angolan SMEs, CAE researched and produced a booklet listing the financing services available in Angola through local banks. In conjunction with the launch of its financing book, it sponsored a financing fair for representatives from the local banks and the companies registered with CAE - one of the first in Angola. A Bumpy Road to Success -------------- ¶6. (SBU) CAE has helped fill the void in Angola of providing practical - and often basic - business advice to SMEs. In has conducted due diligence checks on its client companies, collecting confidential business information in a country which guards information closely. More importantly, it has succeeded in impressing acceptable operational and ethical standards upon a new generation of entrepreneurs. Although the oil companies helped create and fund CAE to develop SME capacity and create a base of independent companies to satisfy their local content requirements, they are still not able to source directly from many of CAE's beneficiaries as these companies do not yet have the capacity or money to purchase and store the quantities of goods necessary to meet the demands of large multinationals. Though still relatively small, CAE has evolved into a valuable resource for both Angolan and new-to-market US SMEs. FERNANDEZ