Angola’s newest electronic meter production plant kick-starts operations

October 11, 2022

Frederico W.L. Pinnock Makilanda, chairman and CEO of Hengye Electronics Indústria, talks to The Energy Year about the company’s new meter factory and the Angolan government’s plan to provide electricity and water meters. Hengye Electronics Indústria has built a first-of-its-kind water and energy meter production plant at the Luanda-Bengo Special Economic Zone (ZEE).

What are the latest developments in the water and power sectors in Angola?
We’ve achieved great success in our plan to increase our power generation sources, as seen with the expansion of the Laúca hydropower plant and the upcoming Caculo Cabaça dam. This success has given Angola a great capacity for power generation. Currently, we are producing an estimated 5.88 GW, which leaves us with the task of rationalising the electricity grid’s operative system. Great water projects such as Quilonga and Bita will enable Luanda to respond to the needs presented. At the moment, we are better served in terms of water and energy compared to 2017. The government’s strategy has indeed borne fruits so far. The government aims to diversify the economy. The aim is to diversify from oil and gas into different sectors.

How competitive is the electricity and water meter supply business in the country?
We are waiting for the sector to open up and for private players to be able to buy and install meters independently. The only companies that can buy electricity meters are public electricity companies. Private companies can also buy meters, but they will have to liaise with utility companies so the meters can be registered in the system. You need to prepay to have access to electricity or water.
Furthermore, there is progress, as the Ministry of Energy and Water recently launched an international tender to procure electricity meters that we are also participating in. The government has a significant plan for local production. We have a similar law in the power sector to that of the local content regulation in the oil and gas industry.

Regarding upcoming tenders, how does Hengye compare to the competition?
We believe we will be competitive in cost and quality. We aim to supply quality meters which will give accurate billing through high-end technology that protects against fraud or tampering with the meters with the use of magnetic readers for the water meters and an automatic lock for the electricity meters.
These features will give us a competitive advantage in the beginning phases.
Hengye is not a reseller but a factory with a technology developer department and a global capacity to build more than 10 million meters annually throughout the world.
Moreover, if clients have any problems, we have a local management system through our data and call centre that provides 24/7 technical support and deals with complaints and breakdowns.

What is the current state of Hengye’s electricity meter factory?
We have built two industrial facilities in the ZEE with an annual production capacity of 500,000 prepaid low-voltage and industrial meters, all with STS certification [Standard Transfer Specification].
We have already finished training our team in the production and installation lines.
We have more than 500 Angolan employees to guarantee the production, assembly and installation of the devices. Of these employees, 35% are women with an average age of between 25 and 30 years.
In our first phase, we will annually produce 300,000 electricity meters and 200,000 water meters. We’ve managed to conclude our first phase of the factory project.
The project began five years ago when we realised the need energy and water distribution companies had for prepaid meters, which effectively measure and control consumption.

 

What are the main challenges associated with the transfer of know-how to manufacture electric products in-country?
Angola has never had an electricity or water meter plant before.
We do have great, talented technicians from Angola and only two senior technicians from China.
For the installation, we’ve decided to recruit technicians who worked for similar production companies, so they can help train the other technicians and improve their skills. However, these highly skilled technicians are not so easy to find.
Our factory is helping us train more of our technicians on how to assemble and test the meters and how to make them function, and we will ensure that the meters respect all international standards before we deliver them.
We also have a call and data centre, which is going to assist our utility companies with management and maintenance. We will have real-time information on how the consumers are using the meters.

What impact might the local fabrication of electricity meters have on the national power sector?
We want to help the Angolan state reduce import costs and stop it from resorting to net foreign currency reserves. We believe that by locally manufacturing prepaid meters, we will help companies in the water and energy distribution sector increase operating revenues and reduce import costs without the obligatory use of foreign currency. With the prepaid meters, customers will have better control over their daily consumption and will be better able to manage family expenses. All of this requires extensive training for effective transfer of knowledge to the employees.

What is the main market for Hengye’s products?
To start with, we want to satisfy the local market because the demand is very strong. Then, we will be looking at the region because we’re talking about roughly 200 million potential customers.
Angola has commercial agreements with various countries in the region, and we have the African Continental Free Trade Agreement.
That has already helped us make a move towards supplying regionally.
The main goal here is to produce locally and make Angola an industrialised country with local factories.

Is the Hengye Group planning to venture into other businesses?
The group has five other projects in its portfolio to build factories across the country in various areas of the national economy. These will generate more than 4,000 direct jobs and as many indirect ones. My priority is to participate in making Angola a better country and a safer country to create more skilled jobs so that our communities can live comfortably. As Agostinho Neto once said: “Agriculture is the base and industry is the decisive factor.”

How important is assistance from the Agency for Private Investment and Promotion of Exports of Angola (AIPEX) and ZEE when starting a new business in Angola?
Being in the ZEE has many competitive advantages. These include infrastructure, energy and running water, security, telecommunications and geographical location, as it is located in the most populous province of the country. We can also not leave out the professionalism and seriousness of the ZEE administration, which has been key to the company’s development and the growth and diversification of the Angolan economy in general. The ZEE has many advantages for foreign and local investments. The country has done impressively well for the past five years in enhancing the business environment, such as facilitating investment repatriation.
AIPEX helps companies succeed and elaborate their projects, and then they assist companies at state levels and help them understand the country’s finance policies. In 2021, AIPEX registered more than 400 projects with the potential to create more than 30,000 jobs.

Read our latest insights on:

• Angola