agriculture presentation
DESCRIPTION
Presentation given by Minister Pacheco about Agriculture in Mozambique. This presentation was made during a small event organised by Africa Matters Limited (www.africamatters.con) on 7 June 2012.TRANSCRIPT
1
Agenda
Why Invest in Agriculture In Mozambique
Agribusiness Strategy and Corridor Attractiveness
Agribusiness Opportunities in Mozambique
2
Mozambique at a Glance
Source: IMF World Economic Outlook Database, September 2011; World Bank
Tete
Niassa
Gaza
Sofala
Zambezia
Manica
Nampula
Inhambane
Cabo Delgado
Maputo
Demographics (2010)Demographics (2010)
Population: 23.4 million Capital: Maputo National Language: Portuguese Business Languages: Portuguese & English
Population: 23.4 million Capital: Maputo National Language: Portuguese Business Languages: Portuguese & English
Land and ClimateLand and Climate
Area: ~80 million ha Arable Land: 36 million hectares Climate: Tropical to Sub-Tropical
Area: ~80 million ha Arable Land: 36 million hectares Climate: Tropical to Sub-Tropical
Key Economic Indicators (2010)Key Economic Indicators (2010)
Currency: Metical, Abbreviation: MZN GDP: USD 9.59B GDP per Capita: USD 410 Projected Annual GDP Growth: almost 8%
per year average until 2015`(One of the fast growing economy in the World)
Agriculture Contribution to GDP: 23%
Currency: Metical, Abbreviation: MZN GDP: USD 9.59B GDP per Capita: USD 410 Projected Annual GDP Growth: almost 8%
per year average until 2015`(One of the fast growing economy in the World)
Agriculture Contribution to GDP: 23%
Mozambique is a stable, high economic growth country with substantial agricultural potential
3
Mozambique: A Nation of Potential
Significant private sector investments
Major infrastructure investments
Numerous innovative public-private-people partnerships
Agricultural development seen as critical to country’s development, with activities across sectors focused on 6 agriculturally attractive corridors
Government business incentive programs Specific organizations set up to organize and assist investors
36 million ha of arable land, mostly unutilized Tropical to sub-tropical climate with fertile soil and ample
rainfall Tremendous irrigation potential from major rivers
Strong and growing economy
Reliance on imports: Large import substitution opportunity
Coastal position: Access to international and regional markets
The country’s potential can be captured in four key areas
Enabling Environmen
t for Investments
Government
Commitment to Market-
Driven Growth
Strong Market
Dynamics
Excellent Agro-
Ecological Conditions
4
Excellent Conditions for Agriculture
High Agricultural
Potential
EXTENSIVE WATERWAYS
YEAR-ROUND PRODUCTION POTENTIAL
10 DISTINCT AGRO-CLIMATIC ZONES
VAST UNUTILIZED
ARABLE LAND
36.0
Unutilized
30.6
5.4
Arable Land
85.0%
15.0%
Utilized
Land Suitability
Mill
ion
He
cta
res
Suitable for rainfall agriculture
Moderately suitable for rainfall agriculture
Utilization of Arable Land
Major rivers such as Zambezi, Limpopo, Save, and other tertiary rivers offer tremendous irrigation potential
Tropical climates offer potential for year-round, high yield crop production
Mozambique boasts ideal growing conditions – plentiful water supply combined with diverse micro-climates support a broad range of agricultural commodities
5
Strategic Location
Mediterranean
China/ India
Middle East
Neighboring Countries
Mozambique: Proximity to High Opportunity Markets
Natural gateway to the Middle East, Mediterranean, and Asia
Bordering regional markets like South Africa, Zimbabwe, and Malawi
Port upgrades at Nacala and Beira will further trade opportunities
Natural gateway to the Middle East, Mediterranean, and Asia
Bordering regional markets like South Africa, Zimbabwe, and Malawi
Port upgrades at Nacala and Beira will further trade opportunities
Mozambique has an advantageous geographic positioning, providing an ideal gateway to both international and regional markets
6
Innovative Agricultural Partnerships
Beira Agr. Growth Corridor (BAGC) Partnership
– Catalytic Fund of USD 20M in publicly-backed investment for startup agribusinesses
– First African country with a dedicated catalytic fund for agriculture AGRA + Standard Bank
– USD 25M loan guarantee facility GoM + World Bank
– USD 70M irrigation program (“Proirri”) USAID Agrifuturo
– Program to promote agribusiness Pro Savana
– Partnership between GOM, Japan and Brazil to develop agribusiness
Examples of Successful Public-Private Partnerships UnderwayExamples of Successful Public-Private Partnerships Underway
Innovative public-private partnerships to transform Mozambique’s agriculture are being implemented
7
Agenda
Why Invest in Agriculture In Mozambique
Agribusiness Strategy and Corridor Attractiveness
Agribusiness Opportunities in Mozambique
8
• Patient capital
• Skills and training
• Community support & engagement
• Human capital and capacity
• Expertise• Markets• Commercial
Financing
• Enabling environment
• Infrastructure• Research
PublicSector
PrivateSector
Development
PartnersMozambican
People
Aligning Efforts Across Stakeholders
The four stakeholder groups of the Public and Private sectors along with People and development Partners are key to developing Mozambique’s agriculture potential
9
PEDSA: Strategic Plan for Agricultural Development
Source: Ministry of Agriculture
Vision: Vision: An integrated, prosperous, competitive
and sustainable agriculture sector
6 corridors targeted: Align efforts across public, private, and development sectors through:– Agricultural potential– Support services (research centers, educational institutions)– Connection to market (infrastructure)
Agricultural production and productivity to increase ability
to compete
1
Infrastructures and services for
markets and improved marketing
2
Land, water, forest and
wildlife resources used
sustainably
3
Agricultural institutions
strengthened
4
Summary of PEDSA, 2010 to 2019 Strategic Plan
Four Discrete Pillars in Progress to Achieve Agricultural Vision
A ten-year agricultural strategic plan was developed to focus efforts and maximize alignment of activities amongst these stakeholder groups
10
Agriculture Growth Corridors
Provinces within Beira, Nacala, and Zambezi Valley
Corridors*
Niassa
Gaza
Sofala
Zambezia
Manica
Nampula
Inhambane
Cabo Delgado
Maputo
Tete
NacalaNacala
BeiraBeira
Zambezi ValleyZambezi Valley
Pemba LichingaPemba Lichinga
MaputoMaputo
LimpopoLimpopo
Note: * Color coding represents approximate positioning of corridors
River Networks in Mozambique
Six Corridors in Agricultural Strategy
Mozambique has identified six corridors
Mozambique has identified six corridors
Three of which are being highlighted in the
conference
Three of which are being highlighted in the
conference
These corridors hold most of the country’s
water resources
These corridors hold most of the country’s
water resources
Investments in agriculture are organized in corridors. Nacala, Zambezi Valley, and Beira corridors in north and central Mozambique display high agricultural potential
11
Nacala Agricultural Growth Corridor
Source: Ministry of Agriculture
Investments MadeInvestments MadeAttractiveness of NacalaAttractiveness of Nacala
Nacala Special
Economic Zone
Nacala Special Economic Zone provides 500 ha industrial free zone with no VAT and customs duties, as well as technical assistance
Nacala Port Potential
Upgrade of the deepest port on East African coast at Nacala
Mining USD 4.4B upgrade to
rail by Vale
Demand from Mining
The mining sector is increasing demand for agricultural products; currently imported from South Africa at high cost
Bananas Matanuska: USD 60M
invested to date focused on bananas
The government has focused significant resources and business-friendly investment programs on the Nacala Corridor
Forestry
Green Resources: USD 2.2B eucalyptus plantation and industrial infrastructure
Soybeans
Rei do Agro: Mozambican company investing USD 5M for soy and maize production
12
Zambezi Valley Corridor
Note: 1PROIRRI project is part of both the Beira and Zambezi Valley CorridorsSource: Zambezi Valley Development Agency
Investments MadeInvestments MadeAttractiveness of Zambezi ValleyAttractiveness of Zambezi Valley
Vast Water Reserves
80% of the country’s water reserves are found in the Zambezi Valley corridor
Agro-Processing
Chinese government USD 50M investment for cotton, maize and rice processing facilities
Irrigation1
USD 70M World Bank PROIRRI irrigation project, mainly aimed at irrigation for rice
Port Infrastructure
Estimated USD 1B port investments by Rio Tinto
Zambezi Valley has the greatest agricultural potential, with the highest concentration of the country’s water resources
RiceOlam is investing USD
50M over the next 4 years
Broad Crop Variety
Diverse topography and good rainfall during cropping season provides perfect climate for a variety of crops
Large Local Demand
Local market potential as one of the most densely populated provinces
13
Beira Agricultural Growth Corridor
Note: 1PROIRRI project is part of both the Beira and Zambezi Valley CorridorsSource: BAGC
Investments MadeInvestments MadeAttractiveness of BeiraAttractiveness of Beira
Infrastructure and
Connectivity to Region
Well-developed infrastructure with road and rail network linking Zambia, Malawi, Zimbabwe and Mozambique to the port of Beira
Demand from Mining
Activities
A number of multi-billion dollar mining investments are going ahead, which will improve access to infrastructure in the region and boost local demand
Catalytic Fund
USD 20M for the BAGC Catalytic Fund
First catalytic fund dedicated to agriculture in Africa, which is already leading to a number of investments
Irrigation1
USD 70M World Bank PROIRRI irrigation project, mainly aimed at irrigation for rice
Beira PortUSD 67M from JICA and
EU for upgrades to the Port of Beira
Beira currently has the most developed infrastructure and linkages to neighboring countries
14
Agenda
Why Invest in Agriculture In Mozambique
Agribusiness Strategy and Corridor Attractiveness
Agribusiness Opportunities in Mozambique
15
Fruit Vegetables
Pulses
Cashew
AquacultureForestry
Maize
Livestock
CottonIII
Oilseeds
Soybeans Banana
For the sixteen prioritized commodities, additional information is included in differing levels of detail to supplement the investment cases distributed during the Forum
I
CassavaSugar Cane
Poultry
II
Commodities Analyzed
Rice
16
Fruit Vegetables
Pulses
Cashew
AquacultureForestry
Maize
Livestock
CottonIII
Oilseeds
For the sixteen prioritized commodities, additional information is included in differing levels of detail to supplement the investment cases distributed during the Forum
CassavaSugar Cane
II
Commodities Analyzed
Soybeans Banana
I
PoultryRice
17
There are business opportunities in several parts of the value chain as well as for an integrated producer
One of those opportunities is a medium-size milling facility, which requires investment of ~USD 5M
Would be supported by 3,000-5,000 smallholder farmers
There are business opportunities in several parts of the value chain as well as for an integrated producer
One of those opportunities is a medium-size milling facility, which requires investment of ~USD 5M
Would be supported by 3,000-5,000 smallholder farmers
Major gap exists between domestic production and demand Climate and soil are very well-suited to rice, with
opportunities for year-round production Significant investment is underway, which may dramatically
improve current infrastructure and raise rice yields
Major gap exists between domestic production and demand Climate and soil are very well-suited to rice, with
opportunities for year-round production Significant investment is underway, which may dramatically
improve current infrastructure and raise rice yields
MarketMarket
Investment OpportunitiesInvestment
Opportunities
Executive Summary
Rice
18
Production growth has not been able to overcome demand growth – keeping imports high
Source: IRRI, FAOSTATS, USDA
Growth PotentialGrowth Potential
MarketMarket
Mozambique has the 3rd highest rice consumption in SADC, but is mostly dependent on imported rice– Unlike neighbor countries, the share of
imports has not reduced over time and instead remains around ~60%
– Despite the significant growth potential for rice (Mozambique’s climate and soil are considered very well-suited to rice), domestic production has only grown at the same rate as imports
Without increased local production, this gap will only grow due to a projected 7% domestic demand increase per year
455239
2009
+90%
2000
60%
40%
20%
0%
80%
20112010200920082007200620052004
9%
62%
Consumption of Rice (in ‘000 tonnes)
Share of Imported Rice on Local Consumption
MalawiZambiaMozambique
Gap: Neighbor countries reduced
imports to ~10%
Gap: Neighbor countries reduced
imports to ~10%
Rice consumption has doubled over the past decade, but without significant reductions in rice importations
Rice – Market Analysis (1/2)
19
There are business opportunities throughout much of the value chain, as well as for an integrated producer
A ~USD 4.5 M soy extraction & refining center was selected as an example, utilizing 3,500-4,000 hectares of soybean fields as inputs
~1,400 smallholder farmers included into the supply chain
There are business opportunities throughout much of the value chain, as well as for an integrated producer
A ~USD 4.5 M soy extraction & refining center was selected as an example, utilizing 3,500-4,000 hectares of soybean fields as inputs
~1,400 smallholder farmers included into the supply chain
Demand for soybeans is increasing due to the development of poultry and soy oil sectors
Downstream markets are highly dependent on imported inputs
High availability of natural resources may benefit expansion of soybeans crop
Demand for soybeans is increasing due to the development of poultry and soy oil sectors
Downstream markets are highly dependent on imported inputs
High availability of natural resources may benefit expansion of soybeans crop
MarketMarket
Investment OpportunitiesInvestment
Opportunities
Executive Summary
Soybeans
20
Value chain integration is the basis for an attractive investment prospect
Opportunity for an investment of $5–6M in a 300 hectares commercial banana plantation leveraging nearby producers to achieve scale at lower investment levels
Value chain integration is the basis for an attractive investment prospect
Opportunity for an investment of $5–6M in a 300 hectares commercial banana plantation leveraging nearby producers to achieve scale at lower investment levels
Opportunity to meaningfully increase Mozambique’s banana exports– Demand imbalances exist in the Middle East, the
Mediterranean, and to a lesser extent Southern Africa– Year-round, high-yield crop potential within
Mozambique provides additional export opportunities and improved margins
Potential for lower farm costs than other competitors
Opportunity to meaningfully increase Mozambique’s banana exports– Demand imbalances exist in the Middle East, the
Mediterranean, and to a lesser extent Southern Africa– Year-round, high-yield crop potential within
Mozambique provides additional export opportunities and improved margins
Potential for lower farm costs than other competitors
MarketMarket
Investment OpportunitiesInvestment
Opportunities
Executive Summary
Banana
21
Significant Potential for Import Substitution Makes Poultry a Strong Investment
Demand for poultry has grown meaningfully across Africa
– Poultry’s consumption has more than doubled in over 10 African countries over the last decade, with high dependence of imports from Brazil, Asia, and US
– Opportunity for local players to supply this demand due to geographic advantages
While domestic demand in Mozambique has grown slightly in past, future demand is expected to more than triple in the next 10 years
– Impact of considerable growth in mining as well as oil and gas sectors on working population will help full domestic demand
Feed costs correspond to ~75% of total costs – with growth in the domestic soy cake industry, potential for reduced input costs could further drive demand
Poultry Consumption in Africa (in ‘000 tonnes)
904
Zimbabwe
5724
Angola
14555
South Africa
1,228
2007
2000
+36% +164% +133%
African countries has reported meaningful growth in demand for poultry meat
Poultry Consumption in Mozambique (in ‘000 tonnes)
2020e
137
2010e
42
2000
35
Poultry consumption has grown less in Mozambique, but future growth is expected
+21%+226%
Note: Djibouti, Comoros, Cape Verde, Ghana, Gabon, Gambia, Angola, Democratic Republic of the Congo, Zimbabwe, Congo, Sao Tome and Principe and Guinea. Source: FAO, USAID, TechnoServe, Monitor Analysis
Poultry – Market Analysis
22
Mozambique
Our Challenge is to contribute towards the victory against
poverty.
Our Pride is to increase food
production and generate more
wealth.
Our Destine is to achieve global food
and nutritional security.
Abdul CesarAgricultural Promotion Centre
+258 82 300 [email protected]
Lourenço SamboInvestment Promotion Centre
+258 21 313 [email protected]
Contact Information:
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