The Business Year

Carlos Henriques

MOZAMBIQUE - Agriculture

Food for Thought

CEO, Mozfoods

Bio

Carlos Henriques graduated from Eduardo Mondlane University in 1977 after studying Veterinary Science, and from the UNISA School of Business Leadership in 1997 after completing the Advanced Executive Program. He has 25 years experience in commercial agriculture in Mozambique, centered on developing operations from inception to mainstream activities. He was a non-executive member of Mozambique Road’s Board (ANE) from 1999 to 2003 as well as several other commercial companies, and he currently serves on the board of the Beira Agriculture Growth Corridor (BAGC) . He worked for eight years (2002-2010) as Deputy Managing Director of CPMZ, the pipeline company that supplies refined petroleum products to Zimbabwe from the port city of Beira, before joining Mozfoods.

To what extent will Mozfoods’ social enterprise model support the local agricultural market? It is definitely not the only model, but it is one that we want to extend to […]

To what extent will Mozfoods’ social enterprise model support the local agricultural market?

It is definitely not the only model, but it is one that we want to extend to other areas of agriculture and to other provinces in Mozambique. The center of the country has a climate that is well suited for vegetable production. Originally, the business was developed to supply the UK and then extended to South Africa and the domestic market. Initially, all the production came from our own farms and later extended to other growers, which we brought into the system and supported through credit, inputs, technical assistance, and route-to-market guaranteed prices. Because our model is export-oriented, certain levels and parameters of quality have to be attained.

What level of infrastructure did you have to invest in so you could ensure route-to-market logistics?

Infrastructure is a major hurdle for anything you do in Mozambique. The most important infrastructure we have is telecommunications, which is also expensive. The roads, railways, and power infrastructure in Mozambique is limited. When we started our vegetable venture, all the pumps running the irrigation were operating with diesel, which comes at a very high cost. Today, all of those pumps are electric. In terms of infrastructure, we are much further ahead than we were before, but there are many other obstacles to overcome. One important element is finding reliable logistics partners.

How much of your business will be directed to domestic supply rather than exports when the resource companies come in?

Previously, 85% of our exports were destined for Europe, 14% for South Africa, and approximately 1% was allocated for Mozambique. However, now only 50% goes to Europe, nearly 30% to South Africa, and 20% to Mozambique. I hope in the not-too-distant future that about 50% of our business will be for Mozambique.

What sort of competition do you face from imports?

There is a large number of products that we cannot sell in the Maputo market, which is the largest one in the country. Our vegetable growing area is located in what is considered a fruit fly endemic zone. That means that we cannot take fresh products produced in a fruit fly area to Maputo, which is a fruit fly free area. Our best produce for export is a type of chili that we can sell in the UK for £9 per kilo, but I cannot bring it to Maputo because of the fruit fly restrictions. We supply South Africa with certain products produced in our farms in the center of the country, but similar products from South Africa are imported and sold in Maputo, for logistical reasons. However, there is a good explanation for this. There are no logistics to bring products from our farms to the south; it is 1,200 kilometers from our farms to Maputo, and the local airline only allows 150 kilos of produce a week to be sent to Maputo.

In terms of international investors coming in to contribute to the agricultural sector, what are the challenges and benefits?

It is a matter of making the right decision. For example, we had to drop the prices of our rice 15% in November 2011 because the currency had appreciated by 30% and no one was buying it. Rice was suddenly expensive and people could access much cheaper rice that was imported. If you look at the neighboring countries of Tanzania, Uganda, and Kenya, to import rice you must pay a 70% duty. Mozambique has conditions like no other Southern African country in rice production, and we should have a surcharge of 10% to promote rice. Given that Southern Africa imports about $2 billion worth of rice per year, we should be able to take advantage of the situation and develop it.

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