What will be the impact of COVID-19 on the Mozambican economy and your operations?
This global pandemic is a new and unforeseen development that will affect the world's health systems as well as the global economy. All we can do is to prepare ourselves against this threat and try to limit the damage. At Nacala Logistics, our first priority is to ensure the safety of our local and international staff. We have taken a series of measures that include all the different segments of the Nacala Corridor, from Moatize, Tete, and Malawi to Nacala. In terms of hygiene, we ensure our employees have access to all the necessary products, such as hand sanitizers and masks. We are applying a daily systematic control of potential symptoms developed by our workers, even those who are working from home. We want to provide comfort and security to our workers in a way that does not hinder operations. In terms of the impact on the economy, we are still at an early phase of the pandemic to make a definitive assessment. At the moment, the demand for exports and imports has dwindled. This is a problem for Mozambique and its neighbors, which are highly interconnected and dependent on the movements of imports and exports for domestic consumption. While Mozambique's economy will be put under strong pressure, and things will be hard in the coming months, I do not see this affecting production and trade in the medium to long term. There will be a recovery; every post-crisis period represents a momentum for rapid and strong growth.
What have been the main highlights for Nacala Logistics?
Since its inception, Nacala Logistics' primary goal was the efficient transportation of goods to and from the Mozambican port of Nacala. Guided by this mission, we have built one of the best railways and port infrastructures in Africa, with a highly modern signaling system, a railway infrastructure with large capacity, and modern wagons. To improve efficiency, in early 2020, we started pushing through a rebranding plan, regrouping all entities of the Corridor of Nacala—the Northern Development Corridor (CDN), the Nacala Logistics Corridor (CLN), and the Central East African Railways of Malawi (CEAR)—into a single commercial entity, Nacala Logistics. The main goal is to strengthen and dynamize these companies, improve management and operations efficiency, and provide security to our clients such as Vale as well as those who import and export consumer goods through the corridor. Since 2016, we have transported almost 30 million tons of coal and almost 2 million tons of consumer goods for countries in southern Africa. These numbers are constantly growing. Our expectation for 2020 is to transport 500,000 tons of consumer goods and to double this amount in 2021. For coal, we want to transport 10 million tons in 2020 and 15 million tons next year.
How would you define your commitment to developing Mozambique's economy?
The project was born out of the necessity to ensure the efficient transportation of coal from the Moatize mines in Tete province to the port of Nacala, passing through Malawi. Thus, our main client has always been Vale, the biggest producer of coal in Mozambique. However, every mine has a limited lifespan; after reaching its peak, its volume of production slowly dwindles, while the port and the railway infrastructure continue. For this reason, we have oriented our investment to serve wider economic activity from the start, in parallel to the coal industry. Given the enormous potential of agriculture in Mozambique, we have committed to develop this sector as the biggest long-term value chain. Indeed, one of the main benefits of the project is that it brings development and employment to the nearby communities, driving small economies. There will not be development if it is not inclusive; for this reason, more than 90% of our workers are locals, and we want to increase this number to almost 100% by the next five years. We have a number of projects to support the 15,000 families that live along the corridor. We are supporting the creation of an industrial park in Nacala and Blantyre, we have a program to promote agriculture in Nampula and its surrounding regions, and we have an important program with our engineering department to support local SMEs, with the aim of transforming local companies and agri-businesses into suppliers for the corridor. Developing the local value chain is also key to ensure the efficient, timely, and cost-effective delivery of services in the long run and avoid dependence on foreign services and products.