Mozambique offers diversified options to invest in its mining industry.
Rui Barros (RB): Absa acquired the then Banco Austral a few years before Absa itself was bought by Barclays in South Africa in 2005. Prior to this, Barclays already had a strong presence in the African market so the Absa subsidiaries outside of South Africa were rebranded as Barclays. Only a couple of years ago, the Barclays Africa Group was formed and a definitive strategy to bring Africa operations to the global market was created. Over time, Barclays maintained a consistent banking strategy in Mozambique but with other decisions happening at a Barclays Africa level, we are now ready to bring a new strategic approach from Barclays to Mozambique. We will be focusing more on the large corporations and international business deals. As for me, prior to this position I was with Standard Bank in Mozambique. The shift was about the challenge of leading an organization and reshaping its presence in the market, especially given the path that is ahead of us. My personal background is in capital markets and investment banking first, and risk management more recently. This role is a great opportunity to bring together the different experiences that I have in terms of product and segment knowledge and also in terms of the culture that the market plays in.
What are the key initiatives that Barclays will be focusing on with the new strategy?
RB: Barclays Mozambique is embarking on a significant shift, which involves targeting new segments and giving more attention to specific segments. Barclays Mozambique has to undergo a fundamental change regarding organizational culture. We are aiming to improve the work environment, the customer experience, and to bring innovation to the marketplace. There is a significant amount that we are aiming to do in Mozambique and we hope that Barclays will be known for innovation both inside and outside of the company.
Could you highlight some key transactions within the mining sector that Barclays has been involved with?
RB: Barclays Mozambique’s business model until now was not so centered on the large corporates and had not been operating much within that sector. The reason for this is that regulations stipulate a cap in the lending exposure to each single entity, which is based on the bank’s capital. Given our lower capital base until now, Barclays was not able to operate at such a level but is now busy effecting that change and there is a significant capital injection underway. This will increase our lending capacity and place us in a much better position to compete in Mozambique’s mining sector.
Projections indicate 2016 as a target for an upswing in the global coal market. Does Barclays agree with this and how is Barclays preparing for this anticipated influx of operations in Mozambique?
RB: Fundamentally, the world has not changed that much in terms of the resources that we use. Intuitively, prices will get back to a level where it is economically viable to operate not only the mines in Mozambique but also around the globe. Producers can control the output to keep the price under a certain range, so it is more about the demand than the supply and the demand did not change that much. Barclays is getting ready to service its customers with excellence. It is not only about the capacity, but also about the quality of the service that we are able to provide. The Barclays advantage is the widespread, world-class international support of Barclays Group resources around the world. We can offer multinationals entering the Mozambique market a familiar brand and a consistent service. Barclays has presence in about 50 countries and can cover them from central locations, therefore offering growing sectors international expertise and local service.
We have seen the Mozambique government working to create sustainable policies to accommodate the growth in the market, but implementation remains a problem. What challenges does Barclays face in terms of the current legislation?
RB: Mozambique is a country of extremes, and it is quite challenging for the government to be able to cope with such a rapid growth. The government needs to provide sustainable development in all the fronts, such as infrastructure, education, and health. If Mozambique can successfully implement the existing legal framework, that will be an improvement. Barclays will be playing a role in advising and structuring new market entry into Mozambican.
How does Barclays Mozambique compete in the local marketplace and how will that shape the coming years?
RB: Barclays has been in Africa for more than 100 years. We know Africa very well and are putting it at the forefront of all our emerging markets. There are strong competitors in the local market, but Barclays has the ability to connect customers globally with experts in each sector, which the competition is not always able to offer. Barclays is establishing a platform where client satisfaction is our number one goal. Mozambique today is a great opportunity to invest, as there is diversity in available sectors.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2015. To participate in this report, please contact Sharon Saylor at email@example.com.