DANILO CORREIA

Mozambique 2020 | ENERGY | VIP INTERVIEW

TBY talks to Danilo Correia, CEO of Puma Energy Mozambique, on operations across Africa, the needs of the oil and gas sector, and developments in the regulatory environment.

What is the importance of Mozambique for Puma Energy's global operations?

Puma Energy is a downstream company present in 18 African countries, 12 of which are thriving. We have been in Mozambique for 10 years. In Mozambique, we operate six lines of businesses: retail, B2B, aviation, bitumen, storage, and lubricants. Mozambique is one of our most promising markets. It ranks fourth in terms of potential for growth and first in terms of profit margins, which indicates that the market is in the maturity phase. My vision for Mozambique is that in five years it will become one of the biggest contributors for Puma Energy Africa.

What are the most important segments for Puma Energy?

At present, our greatest focus is on retail, where we want to grow our network and improve our customer service. B2B is also important because Mozambique still lacks the infrastructure to support its industry, so customers need solutions for their energy needs. Aviation is a growing market all over Africa; we are the market leaders in Mozambique, supplying to the seven major airports. Storage is important because of Mozambique's geographical position, which makes it a strategic corridor for inland areas as well as neighboring landlocked countries. Lubricants is also an important sector. We currently have terminals in Maputo and Beira, and we intend to grow our terminal capacity and build new terminals. The bitumen segment is currently lagging behind, given the huge drop in construction. In terms of clients, we are increasingly focusing on the needs of the oil and gas sector, which has high energy demands. We also want to target clients in the mining, agriculture, and fisheries industries.

Would you say you have a strong brand in Africa?

Unlike all the major oil and gas giants, we do not benefit from the same 100-year-old level of brand awareness, and this plays to our advantage. We are perceived as the young kid in the block; we benefit from a relatively young and fresh image and a colorful logo, which evokes agility, the ability to adapt quickly and provide the products and services that are in demand, and the creativeness of youth. All of this makes Puma Energy a particularly appealing brand for Africans.

What is your outlook for 2020?

Despite the challenges on the global scale, I believe 2020 could turnaround Mozambique's economy. After years of preparation in the LNG industry, we are ready to put it all to ground and welcome investments. Mozambican companies are ready. Foreign investors who are interested in Mozambique should bear in mind that they will find a country that for decades has been eager to come out of poverty. They must understand the specificities of doing business in such an environment, which means understanding the history and culture of the country and being patient. It might be challenging at first, but Mozambique will quickly catch-up with the international expectations. If there is clear, honest dialogue between international and local players as well as between the private and public sectors, Mozambique will finally be able to develop without falling into the “resource curse” trap.

What improvement from a regulatory perspective are you advocating for?

Mozambique has some of the highest tariffs for transit in the continent, which makes us completely non-competitive. Even though Mozambican ports represent in many cases the most logical gateways for incoming products in terms of time and distance, companies often choose other options to avoid paying high tariffs. This is killing the industry. Decreasing tariffs might represent a loss of revenue for the government in the short term, but the government should consider the resulting increase in traded volumes, which in the long term would bring in more revenue.