Moussa Konate

TBY talks to Moussa Konate, Managing Director of Vivo Energy Mozambique, about new initiatives, hiring locally, and goals for the coming year.

Established in 2011, Vivo Energy is the company behind the Shell and Engen brands across many African markets. Can you elaborate on the company’s evolution in Mozambique?

Vivo Energy, founded in 2011 by Vitol, Shell, and Helios Investment Partners, acquired Shell’s downstream operations across 15 African countries. As part of its expansion strategy, Vivo Energy purchased Engen’s operations in eight countries, including Mozambique. Our takeover of Engen’s activities in Mozambique occurred in March 2019, marking our entry into the market and assuming operational control from Engen operations.

Vivo Energy’s vision is to become the most respected energy business in Africa. What steps is Vivo Energy Mozambique taking to make this happen?

Actually, the vision is ‘to be Africa’s leading and most respected energy business. Indeed, Vivo Energy Mozambique’s journey aligns with our group’s vision. Over the past five years, we focused on developing our retail business. We expanded from 19 retail stations, primarily concentrated in Maputo province with only one site each in Beira and Tete, to over 50 retail stations across the country despite challenges such as COVID-19 and economic disruptions. Retail is the skeleton of our business model, we needed to build a respectable footprint first as the foundation then focus on building our resilience. To build resilience in our business, we have diversified our portfolio. We recently ventured into aviation fuel and have been promoting Shell lubricants, leveraging our exclusive distribution rights across Africa. Our strategy revolves around strengthening our retail presence while expanding into new sectors to sustain growth.

What initiatives has Vivo Energy undertaken in the mining sector?

Vivo Energy is one of the key players in mining sector in Africa. In West Africa, we have developed tailored solutions to assist mines in transitioning to greener energy alternatives from traditional sources. We are actively engaging with mining companies in the region to introduce hybrid solutions aimed at reducing their environmental footprint. Additionally, Shell’s innovative lubricants, with significantly reduced carbon emissions, including some with zero emissions, are being promoted to the mining sector. For example, Shell’s latest Ultra lubricant, derived entirely from natural gas, boasts zero carbon emissions. Our goal is to encourage the adoption of such eco-friendly technologies within mining operations.

How does Vivo adapt to the new necessities of its clients and adapt to new market trends?

As a company, our goal is to proactively innovate rather than simply react to market changes. We strive to stay ahead of the competition by providing solutions that exceed customer expectations. This approach defines us as a corporate entity with a start-up mindset. For example, in the mining sector, we offer solutions that not only improve the business case but also extend the life of mines. By doing so, we transform previously non-viable situations into economically feasible opportunities.

What are the current obstacles or challenges facing the industry in Mozambique and how is the company overcoming them?

One key challenge we face in developing mining activities is the VAT regulation surrounding the industry. Mines benefit from VAT exemptions, shifting the burden onto suppliers who must pay VAT on their supplies to the mines but are not reimbursed immediately. This delay, coupled with high bank interest rates, such as 24%, significantly increases business costs. Addressing these issues, alongside challenges related to foreign currency availability, would incentivize investment. Moreover, streamlining the process for residential permits, currently requiring annual renewal, would reduce bureaucratic burdens and enhance flexibility for investors, ultimately fostering a more conducive environment for business growth in Mozambique.

How does Vivo Energy create lasting social and economic benefits for the Mozambican communities?

Our retail growth strategy emphasizes community development. Each retail station we build is not just a business endeavor, but a social project aimed at enhancing local infrastructure and benefiting the neighborhood. We prioritize hiring from the surrounding community, typically employing 30-40 individuals per station, thereby positively impacting numerous families. Before opening a new station, we engage closely with the community to understand their needs and concerns. This approach fosters a sense of belonging and ownership among residents, who appreciate our investment and view us as integral to their community. Additionally, we partner with NGOs and organizations like A Casa Amarela to support initiatives such as orphanages and community schools. For example, our security team, HSSE, collaborates with schools to educate children on road safety, environmental awareness and safety precautions. Visiting schools or orphanages, you might encounter the future managing director of our company. Our commitment to community development is ingrained in our business philosophy, recognizing that fostering local growth is essential for our company’s success and sustainability.

What are Vivo Energy’s plans for 2024, and what objectives do you aim to achieve by the end of the year?

Vivo Energy strives to be a leading and the most respected player in all the markets we operate in. When we acquired Engen, we were ninth in line, but today we are among the top5 OMCs in Mozambique. We are committed to achieving this vision through continuous efforts. In 2024, we will be focused on driving toward these objectives. Furthermore, we prioritize long-term relationships and partnerships with our customers, emphasizing the delivery of exceptional service and peace of mind rather than simply selling products. Our focus remains on enhancing the overall customer experience.