Construtora Norberto Odebrecht (CNO)
Company Profile and History
Founded in 1944, in Salvador, Bahia State, Brazil Odebrecht has diverse businesses. Over the course of its 65-year history, Odebrecht has taken part in numerous projects in 35 countries. It is present throughout the Americas, as well as in the Caribbean, Africa, the Middle East, Asia and Europe. The leading company for the Group’s Engineering & Construction business is Construtora Norberto Odebrecht (CNO).
Odebrecht began its first international operations in 1979 by working on projects in Peru and Chile.
In 1984, the Group established a presence in Angola when the Group signed the contract to build the Capanda hydroelectric plant. In Angola, as well as providing Engineering & Construction services, Odebrecht invests in the following areas:
- diamonds, through SDM-Sociedade de Desenvolvimento Mineiro de Angola (in partnership with Endiama-Empresa Nacional de Diamantes de Angola) and Sociedade Mineira de Catoca (in partnership with Endiama, Alrosa and Daumonty Finance);
- biofuels, through Biocom-Companhia de Bioenergia de Angola Ltda. (in partnership with Sonangol-Sociedade Nacional de Petróleos de Angola, and the Damer Group);
- real-estate, investing in housing and commercial developments (US$ 606 million in sales in 2008).
In Country Location
Luanda, Angola; Tel. (244 2) 2267-8000/2267-5000; Fax (244 2) 2267-8015 / 8070 / 8071
Services and Products
CNO provides a variety of engineering, procurement and construction services. Through its subsidiaries, CNO engages in the construction of large scale infrastructure projects, such as highways, railways, power plants, bridges, buildings, subways, dams, as well as mining facilities and manufacturing plants, among others. Odebrecht has several construction projects in Angola, amongst others:
- completion of the Morada dos Reis gated community facilities for the Education, Work and Development Program;
- works to regulate the Coporolo, Cavaco and Catumbela rivers and prevent flooding;
- construction of the Luanda/Viana expressway;
- the Luanda Sul Urban Development Project to develop city, build houses, hospitals, shopping mall and schools;
- Luanda Water Project-Stage Three-adding 1,000 more liters per second to Luanda’s Southeast Treatment Station and duplicating the volume of water impounded upstream the station;
- Benguela Water Project to supply potable water to residents of Benguela, Lobito, Catumbela and Baía Farta;
- completion of the Capanda Hydroelectric Plant for a 520 MW hydroelectric plant including construction of a 60-km-long access road, a 255.000 sq.-m residential house condo, a 2,000-m-long runway for aircrafts and a 60-km-long, 30 kV transmission line;
- the Atlântico Sul Condo housing project in Luanda;
- expansion of Golf Highway;
- restoration of piece of the historic Palácio de Ferro;
- construction of the Belas Business Park;
- construction of the Cacuso-Capanda Highway;
- the Condomínio Mansões do Vale and Condomínio do Futungo housing projects;
- enlargement of the Gove Dam;
- Matala Hydroelectric Plant Rehabilitation; and construction of the Catumbela International Airport.
Number of Employees
At the end of 2008, Odebrecht had 26,000 employees in Angola
Composition of Gross Revenue (in millions of USD)*
Odebrecht is one of the 25 largest international contractors, in terms of revenues earned in countries other than its home country. Odebrecht is Latin America’s largest Engineering and Construction Company and the largest Brazilian services exporter. It is also among the world’s largest hydro plants builders. In 2008 it was ranked 2nd in the top ten of International Contractors of Hydro Plants; 3rd international Contractors in Bridges and 3rd International Firms Working in Africa (Construction).
“Odebrecht S.A. seeks to improve the entrepreneurship of the Group’s businesses while promoting people’s development and offering political-strategic support to all Odebrecht subsidiaries; being one of the top five non-financial private-sector business conglomerates in the Southern Hemisphere; being recognized as the Client's choice due to its capacity for entrepreneurship, attracting Talents and grooming new Entrepreneurs; and having annual earnings of over US$ 15 billion and value greater than US$ 20 billion.”
Its business model is based on the Odebrecht Entrepreneurial Technology (TEO), concept. TEO’s core principles are: Path-Survival, Growth and Perpetuity; Confidence in People-their ability and desire to progress; Client's satisfaction, achieved by rendering service with a focus on quality, productivity and responsible care for the community and the environment; Generating return on Shareholders’ investments adding value to their assets; decentralized operations, based on delegation that enables Entrepreneur-Partners to implement their Action Programs freely and responsibly; partnership amongst Members, who actively participate in the conception and execution of their work and share the results achieved; and reinvesting revenues to create new work opportunities and promote the communities' development.
“The global economic turmoil is universal. For that reason, now, more than ever, is the time for continuous investments in competent, integrated teams who are, most importantly, focused on the Spirit of Service, showing the value of those investments and transforming a challenging time into an opportunity to gain market share and exercise leadership.”
Ownership of Business
CNO is a wholly owned subsidiary of Odebrecht S.A (ODB-99.85% of the voting capital, and 99.82% of the total capital), which in turn is 81% controlled by Odebrecht Investimentos S.A., a Brazilian corporation wholly owned by the Odebrecht family. In Angola Odebrecht Servicos no Exterior Ltda (OSEL) and Odebrecht Angola - Projectos e Servicos, Limitada (OAL) are wholly owned subsidiaries of CNO.
Benefits Offered and Relations with Government
Oderbrecht’s management on a regular basis met with President Dos Santos to personally update him on the progress with projects.
The Government of Angola actively promotes private investment by Angolan and foreign nationals in several priority areas including Civil Construction and Related Services, Electricity and Water, Infrastructure Development and Management, Tourism and Hotels, Processing Industries and Mining. The development zones eligible for financial incentives include: Zone A-Province of Luanda, the capital-municipalities of the Provinces of Benguela, Huíla, Cabinda and the Municipality of Lobito Investment operations in Zone A are exempt from payment of duties and fees for 3 years; Zone B-remaining municipalities of the provinces of Benguela, Cabinda and Huíla and the Provinces of Kwanza Norte, Bengo, Uíge, Kwanza Sul, Lunda Norte and Lunda Sul Investment operations in Zone B are exempt from payment of duties and fees for 4 years; Zone C-Provinces of Huambo, Bié, Moxico, Cuando Cubango, Cunene, Namibe, Malanje and Zaire Investment operations in Zone C are exempt from payment of duties and fees for 6 years.
In terms of the general tax law, the following is applicable to Oderbrecht:
“The profits yielded from investments carried out in Zone A, Zone B and Zone C are exempt from the payment of industrial tax for a period of 8, 12 and 15 years, respectively. The sub-contractors hired for the execution of the investment project are also exempt from the payment of industrial tax levied on the price of works carried out in Zone C and for the same period of time.
In addition the investment operations foreseen in this law may consider the following expenses as costs for purposes of determination of the taxable income:
- up to 100% of the expenses incurred in the construction and repair of road, railroads, telecommunications, water supply and social infrastructure for the workers, their families and local inhabitants;
- up to 100% of the expenses incurred in vocational training in all fields of social and productive activity;
- up to 100% of the expenses incurred in investments carried out in the cultural sector and/or purchase of works of art of Angolan authors and creators, provided however that, when classified as such, the same remain in the Country and are not sold for a period of 10 years.
Investments between the equivalent to USD 50,000,00 and USD 250,000.00, according to their nature, location and relevance for regional or local economy are eligible to the following tax incentives: 1.1 Relief to half of customs duties and fees, except for stamp duty and fees payable for services provided over imported equipment to be used in the construction and supply, including vehicles with more than 3.5 tons of gross weight and raw materials, in particular:
- investments in new undertakings, with a favourable impact on the region and that also involve construction and/or rehabilitation of economic and social infrastructure;
- investments in the expansion, rehabilitation or modernisation of commercial or industrial units, in particular, those that have been destroyed by the war;
- investments in priority sectors and/or in Zone C;
- investments that ensure the creation of more than 10 full-time jobs for national workers.
The following investments are exempt from the payment of industrial tax for a period of up to ten years: investments in new undertakings and in the rehabilitation of destroyed or paralysed undertakings in the priority areas (Zone C).
The following investments are exempt from the payment of industrial tax for a period of up to five years:
- investments in new undertakings and in the rehabilitation, extension and modernisation of paralysed undertakings in Zones A and B;
- investments in other industrial sectors, housing, provision of specialized services and technological development.
the provinces covered by Zones A and B for a period of up to five years;
the provinces covered by Zone C for a period not exceeding ten years; and the dividends obtained from investments made in Zone A in the first three years, and in Zones B and C, in the first five years, if reinvested, shall be exempt from taxation.”
In 2009 Odebrecht will spend between US$ 800 million to US$ 1 billion in diversified areas in Angola. Recent contracts awarded include the construction of the Huambo Logistics and Distribution Centre, the Ekunha-Cusse Highway, the Marginal Sudeste Route and the rehabilitation of Mártires Kifangondo.