In September, Ningbo Construction, a Chinese company listed on Shanghai Stock Exchange, acquired South African Anglorand Financial Services Group. Anglorand Securities, part of the group, became the first South African securities company wholly owned by a foreign investor. Why did a private Chinese construction company decide to acquire a South African financial group? Xu Wenwei, Chairman of Ningbo Construction, and Ji Zhenyong, CEO of Anglorand Securities, explain the decision to ChinAfrica .

ChinAfrica: Why did Ningbo Construction purchase a South African financial firm?

Xu Wenwei: From a state-owned company established in 1951, Ningbo Construction is now a large private construction group with a wide range of business. They include housing construction, municipal utilities, engineering and building decor. Ningbo Construction has purchased multiple companies after an initial public offering and listing in 2011. Purchasing Anglorand represents an important step in Ningbo Construction's going global. As the Belt and Road Initiative unfolds and competition in the domestic construction industry becomes increasingly fierce, Ningbo Construction has adopted the going global strategy and is expanding overseas. The South African market is our top choice for overseas expansion.

Financial cooperation is the engine for comprehensive Sino-African cooperation. The purchase will not only help our company expand its engineering business overseas but also enable it to enter the financial services sector.

Why make the purchase now?

At present, the global economy is recovering and stabilizing and Africa especially has strong impetus for growth. However, as the prices of bulk commodities decrease, the United States quits its quantitative easing, foreign capital exits Africa and the income from Africa's natural resources shrinks, the African economy will face increasingly serious capital shortage in the coming years. Nevertheless, Chinese investment in Africa and Sino-African financial cooperation has not decreased but increased. This will not only help African countries to overcome the financial crisis but strengthen the connection between China and Africa.

Purchasing Anglorand Securities represents the upgrading of Sino-African financial cooperation. It's the first acquisition of an African securities company by a private Chinese company. Anglorand Securities is the first South African securities company to be owned entirely by foreign capital.

What is the plan behind the purchase?

South Africa has a comprehensive legal system and an advanced financial industry with the same standards as European and American countries. It's not only an important springboard for Chinese companies to go global but a bridgehead for Chinese companies to enter the African market. Ningbo Construction hopes to deepen Sino-African financial cooperation through Anglorand Securities. We are trying to operate Chinese financial institutions overseas, expand traditional industries overseas through financial institutions, and help Chinese companies invest and raise funds overseas.

In which African industries and countries does Ningbo Construction plan to invest?

African countries have abundant resources, an adequate and young labor force, and great market potential. But they have underdeveloped infrastructure and severe power shortage, which means great investment opportunities. We hope to expand our market in infrastructure construction in Africa. We hope to adopt China's development-oriented finance model and the build-operate-transfer model Chinese construction companies are good at. We also hope to participate in other industries such as the financial industry, high-end light industry, medical care, agriculture and tourism through investments and acquisitions.

What is the most important thing for Chinese companies preparing to go overseas?

According to our experience, the most important thing for Chinese enterprises to go global is to have skilled professionals, from both China and the country they will expand their operations in, and groom competent personnel locally.

What kind of company is Anglorand Securities?

Ji Zhenyong: Anglorand Securities is part of the Anglorand Financial Services Group, which was founded in 1968. The group provides a wide range of products and services including stockbroking, investment banking, institutional derivatives, portfolio management, asset management and forex and treasury services. It currently has assets under management of over 3 billion rand ($70 million), and has a physical presence in Johannesburg (head office), Cape Town and Durban. Anglorand is a registered member of Johannesburg Stock Exchange and South African Futures Exchange. It has a full range of licenses from the South African National Credit Regulator and the South African Financial Services Board.

Why did you choose Anglorand Securities and vice versa?

Few financial institutions in South Africa have multiple licenses. Most have already been acquired by the big financial institutions like banks. Independent securities companies with multiple licenses are even fewer. Therefore, purchasing Anglorand Securities was a rare opportunity for us.

Against the backdrop of deepening Sino-African friendship, it's rational for Anglorand to have chosen a Chinese investor. Eighty-five percent of Anglorand's forex business customers are overseas Chinese. Besides, Anglorand employees have shown support for this acquisition, with no employee resigning before or after.

What are Anglorand Securities' plans?

We will focus on cross-border merger and acquisition consulting and asset management business - especially private equity funds and family businesses in order to allocate Chinese capitals overseas.

We will improve Anglorand Securities' deal-making and fund-raising abilities by acquiring a mature team specializing in initial public offerings and asset management in order to equip Chinese enterprises with the ability to invest and raise funds in Africa.

We will develop Anglorand Securities into a high-end investment bank depending on local teams, connecting Chinese and African markets and specializing in allocation of assets in the world and cross-border mergers and acquisitions.

What is the biggest opportunity in purchasing and managing a local financial institution in Africa?

I think the biggest opportunity in managing a local company in Africa doesn't come from the acquisition itself. It comes from national strategies like the Belt and Road Initiative. Because of China-Africa friendship and their economic complementarity, as well as the internationalization of the yuan and upgrading of Sino-African financial cooperation, we believe being engaged in South Africa's advanced financial industry shows our ability to grasp this opportunity.

What's the latest development since Anglorand Securities was acquired?

Several acquisition consulting programs are under negotiation. Our family asset management business has finished a round of road shows in China and will have new programs soon. Promotion of forex business among overseas Chinese has begun. As China opens up further and Sino-African friendship deepens, I believe Anglorand Securities and Chinese enterprises in Africa will have a bright future.