INDUSTRIALIZATION & MOZAMBIQUE

Mozambique 2020 | INDUSTRY & MINING | VIP INTERVIEW

TBY talks to Marco Correia, CEO of Valoriza, on Mozambique's journey to industrialization.

How important is industrialization for Mozambique and how should the country develop its industry?

Industrialization is a critical stepping stone for the economic development of a country as young as Mozambique. The industrial base of the country has its challenges due to a number of factors, such as access to finance, weak infrastructure, and dependence on imports. The amount of challenges that the country needs to overcome are significant, but there is great potential for growth of a solid and sustainable industrial base. There is an increasing strategic collaboration between the government and the private sector and we must drive growth through a holistic approach that emphasizes the aforementioned challenges. Any talk about industrialization must include an analysis of the country's proximity to regional markets, skilled human capital, access to reliable energy, infrastructure, technology and access to funding solutions, amongst other aspects not mentioned but in no way are less important. Mozambique is blessed with natural resources as well as a strategic geographic position that can be leveraged to serve neighboring land-locked countries, recent history has proven this to be possible. A first step could be the adoption of soft incentives to create a better business environment, such as reducing taxes and tariffs for exports. Large industrial corporations represent less than 5% of our industrial muscle, while the other 95% is comprised of SMEs. Here is where our attention needs to be focused as entrepreneurs, and drive growth of these SMEs by deploying our knowledge and assets towards creating value-added products and consequently improve our exports.

What is the philosophy behind Valoriza's investments?

Valoriza is an industrial investment company. We believe in industrialization through partnerships, so we are always looking out for like-minded partners. We operate as a private equity firm, applying our knowledge to smaller companies in which we identify potential for growth, which essentially stems from the capacity to access local raw materials, add value, and export. One main theme in our investment drive is the recovery of industrial assets. Our shareholders established that a key starting point of any industrialization process is the existence of a solid steel industry. Therefore, in December 2018, with a local partner, Escopil Indústria, we invested in Duys Mozambique, a heavy steel engineering company with the capacity to design, fabricate, install, and maintain heavy structures. Duys Moçambique employs 250 people, 98% of which are Mozambicans. Since acquiring the company, we have seen consistent growth. Through Duys Moçambique we now feel that we are capable of capitalizing on our experience in the sector and are looking to diversify our portfolio and deploy our engineering experience into other industries looking for growth and innovative technology.

What other sectors are you interested in?

We want to diversify our investments. Our main focus is to provide value in the manufacturing sector, driving up economies of scale and promoting technological progress for the economy. Naturally, we are looking at sectors where the country is innately competitive such as mining, ports and harbors, and agroindustry.