BEST FOOT FORWARD

Mozambique 2016 | ECONOMY | INTERVIEW

TBY talks to Jose Parayanken, President of Mozambique Holdings Limited (MHL), on expanding the country's infrastructure, improving water provision, and corporate growth strategies for the future.

Jose Parayanken
BIOGRAPHY
Jose Parayanken studied Biochemistry at Delhi University before acquiring his MBA. He career began at Exim Bank of India where he was in charge of African operations from 1984 to 1989. He later founded Mozambique Holding Group of Companies in 1990, which currently has a capital base of $100 million.

How do you assess the current state of Mozambique's transport and logistics infrastructure?

Expansion in transport infrastructure, ports, roads, and railways is recognized as fundamental to Mozambique's development plan for mining, agriculture and tourism. Traditionally transport and logistics infrastructure provided for half of Mozambique's annual revenue, transporting mining and agro-products from its landlocked hinterland to Europe and Asia. However due to historic reasons, investment and expansion of ports, railways, and roads has not been consistent and the business shifted to South Africa. Grains, metals, and minerals exported from Zambia and Zimbabwe are routed through Durban and Richards Bay, even though Mozambican ports still handle some of the import requirements such as fuel. There have been some expansion investments in Beira, such as the new coal terminal. However, enhancing the ability for Ports such as Maputo and Beira to receive larger vessels would make them more competitive. Aligning the management and concession policies for transport infrastructure to ensure investment in port, rail, and road infrastructure to compete with South African ports will bring back iron ore, coal and commodity exports to Mozambique.

What is the role of Anfrena in Mozambique's ports infrastructure development?

Anfrena was involved in the engineering and construction of the Maputo Fuel Terminal and added LPG and Bitumen Terminals to Maputo Port and is currently constructing it in Beira Port. Anfrena has designed and constructed the tank farm expansion for Petromoc and Puma in Maputo and Beira and the bulk fuel terminal and tank farms for Vale in Moatize. Anfrena is one of the few Mozambican companies specialized in terminal design and development of Petroleum downstream distribution infrastructure design and construction.

Mozambique has vast unexplored mineral resources. What are Mozambique Holdings' current and future initiatives in the mining industry?

Mozambique Holdings' role as a developer in the mining sector is more long term, because of the depressed values for metals and minerals and the comparatively large and long term investment required. However, opportunities exist for our engineering division as EPC contractors.

Potable water facilities were available to less than 25% of Mozambican population in the early 1990s. What role did Afrodrill play in the significant increase of that number?

We have been involved in water resources development through Afrodrill for over a decade. Due to the adaptability and comparative cost advantages of Indian technology, and skilled manpower for rural water resources development, we have been very successful in Zambezia, Nampula, and Sofala. The National Directorate of Water (DNA) has maintained ambitious water coverage targets to ensure access to drinking water for every citizen. We have worked with DNA to develop project profiles and geotechnical studies and have presented these to potential donors and investors for funding support. The government of India and other donors like UNICEF and World Vision have responded and are funding rural drinking water resource development, executed by Afrodrill, in Zambezia, Nampula, and Sofala since 2004. This effort coordinated by DNA has raised the drinking water coverage from the 25% percent in early 2000 to current levels of over 60%.

Mozambique jumped 15 places in the Ease of Doing Business rank. It currently ranks at 127 out of 189 economies. As a foreign businessman, how would you rate regulatory efficiency in Mozambique and what changes would you like to see in the regulatory framework?

Mozambique, at the political level, intends to attract and encourage foreign investment and entrepreneurship to develop its resources through imported technology and services. It has to be streamlined and reconciled with the aspirations of local Mozambicans to be skilled and employed, and encouraging indigenous entrepreneurship. The imported technology and manpower should adapt and evolve into a Mozambican concept in the local context over time.

What will be the main focus of Mozambique Holdings' strategy for the years to come?

Our medium-term focus will be to consolidate our strengths in core sectors to provide more efficient state-of-the-art design, technology, and services and at lower costs through skills and efficiency accumulated over time.

How will you envision Mozambique's mid-term economic future?

Mozambique is blessed with plenty of resources that have yet to be explored and exploited. However, there are also challenges related to attracting investments and technology to develop these resources and train and equip Mozambicans to become entrepreneurs and skilled technicians, thus becoming profit centers contributing to the cost of governance. Policy and planning have to balance the expectations of the population for immediate consumption and betterment of their living standards. There will be austerity and astute planning to apply limited resources to the more essential requirements. I believe Mozambique's progress and future is well planned on sound fundamentals and that the government has the flexibility to respond quickly and effectively to the teething problems of this young economy.