Case study: Mozbife Limitada, Mozambique

Savills are extremely grateful to 'Agriterra' management for giving permission to produce this case study and for providing the information.

7 May 2013, Words by James Cairns

 

Mozbife Limitada is a vertically integrated cattle ranching and feedlot production business based in Chimoio, Central Mozambique approximately 150 kilometres west of the port of Beira.

The farming operation is well located being in the Beira ‘corridor’, which is a developing infrastructure corridor to serve agricultural and other investment operations from Beira in Mozambique through to Bulawayo in Zimbabwe and up to Lusaka in Zambia. The ‘corridor’ is a lifeline for enabling easy transport of inputs and outputs to farming operations of this type.

Mozbife is owned by Agriterra, a company focused on agricultural investment and sustainable development in Africa, providing high quality produce while simultaneously improving the livelihoods of smallholder farmers by improving access to markets.

Agriterra has four main divisions:

• Beef ranching;

• Maize processing and farming;

• Cocoa buying and trading; and

• Palm oil plantations.

Its strategy is to become one of the largest agri-operators and leading food providers in Africa. The company cites a wealth of experience and a good network of contacts as contributory factors to its success. Mozbife has four main operations:

• The 1,350 hectare Mavonde Stud Ranch is stocked with high quality Beefmaster cattle. These are bred for their high growth rates and high quality of meat, in addition to their adaptability to hot climates.

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• The 15,000 hectare Dombe Ranch is rapidly expanding with investment currently focusing on infrastructure, particularly the construction of paddocks, roads and fencing in addition to water boreholes for irrigation during dry periods.

• Mozbife has developed the Vanduzi Feedlot project in line with its strategy to become a vertically integrated beef producer.

• It operates an abattoir at Chimoio, to ensure the full value uplift of the butchered product is realised. This commenced operating in December 2012 and has a target throughput of 4,000 cattle per month, in addition to a goat processing line. Local animals are also processed to boost efficiency.

Mozbife was established to supply premium beef to both the domestic market in Mozambique as well as for export. Beef consumption in Mozambique has been steadily rising and is forecast to continue to grow as living standards across the country improve.

The objective is to build a herd of more than 10,000 cattle and in order to add value and increase profitability it is developing into a ‘field to fork’ producer taking cattle through its own feedlot and abattoir.

Properties are held under the Mozambique DUAT property register, which is in effect a long leasehold interest that offers title security in perpetuity and assignment. The DUAT system allows land and infrastructure developments to be registered thereby achieving value.

This process has been relatively simple for Agriterra as they engaged with the stakeholders, government and community early in the process and are delivering on promises of investment into and development of the land.

Considerable value has been achieved through significant investment in infrastructure for irrigation, dam, fencing, buildings and roads with the most significant uplifts in asset value followed the installation of the dam and irrigation equipment as well as the infrastructure, which allows them to operate as an integrated value chain.

There are pitfalls and Agriterra’s success has been achieved through:

• Experienced management teams on the ground.

• Investing promptly after the initial title permit received. If investment targets are not met then full lease title will not be granted.

• Sufficient capital to develop and establish operations.

• Structuring the company to utilise profits and investment funds effectively.

Mozbife is another example of an integrated beef business doing very well in Africa. Zambeef was the first to prove the model in Zambia and now has a market capitalisation of over $200 million and land values in the region of over $100 million.

 
 

Key Contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

Hugh Coghill

Hugh Coghill

Director
International Farmland

Savills Margaret Street

+44 (0) 20 7016 3818

 

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