African Venture Capital Association 2 October 2012
Kinshasa: XSML announced today its investment in SOGETRA SPRL, through its Central Africa SME Fund. The investment in SOGETRA, involved in river and road transport in Congo, will be used for the construction of new tug boats and barges for transport on the river Congo. This investment enables SOGETRA to meet the increased demand for transporting mainly cement into the interior of DR Congo and to ship agricultural produce and other products back to its capital Kinshasa.
Given the fact that the transport infrastructure in DRC is highly underdeveloped, there is a significant demand for capable transportation companies. The country’s rail infrastructure is dilapidated and rarely operates. This puts additional pressure on road and river transportation companies. While the road infrastructure is good in some areas (such as between Matadi and Kinshasa, DRC) it is extremely poor in others. As a result, contracts for trucking can be very lucrative in margin terms as companies understand that there is premium that needs to be paid to offset the risk associated with operating in areas with poor infrastructure. River transporters largely run between Kinshasa and Brazzaville and between Kinshasa and the interior of the country as they carry goods to Illevo, Lubumbashi and Mbuji-Mayi. The river Congo plays a vital role in Congo’s life as it is often the only connection from the vast interior of Congo to the main capital Kinshasa.
The funding from the Central Africa SME Fund will be used to completely rehabilitate tug boats and barges to significantly augment SOGETRA’s river transportation capacity. This increased capacity will be used to assist SOGETRA’s partner CILU (Cimenterie de Lukala), Congo’s primary domestic cement producer, as the latter seeks to reach customers in Brazzaville and the interior of Congo where access to essential construction material inputs are more scarce. Omar Barcat, general manager of SOGETRA, said: “The support of The Central Africa SME Fund is essential in our expansion for the river transport. By increasing our capacity we can offer a more frequent and reliable transport service on the Congo river.”