Mozambican miller Merec invests US$8m in new pasta processing line

MOZAMBIQUE – The President of Mozambique, Filipe Nyusi has inaugurated a new US$8m pasta processing line in Beira, capital of the central province of Sofala.

The facility has been established by Merec Industries, the country’s largest integrated wheat and maize miller, with financial support from the bank Millennium Bim.

The new production line is the company’s fourteenth and is the largest in terms of capacity, being capable of producing 102 tonnes of pasta per day.

With the addition of this production line, the company’s output will grow to 234 tonnes per day or eight thousand tonnes per month.

Speaking at the ceremony, the President urged other companies to replicate this project in other provinces with good port logistics to reduce the asymmetries in industrial development which currently favour Maputo, Nampula, and Sofala.

According to reports by Club of Mozambique, the investment is a contribution to the national Industrialise Mozambique program, which looks to boost industrialization in the country based on local value chains, and thus attain self-sufficient in food production.

Launched in August 2021, the national Industrialize Mozambique program aims to reduce imports with competitive exports, to modernize the local productive capacity as well as to increase employment and generate income.

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According to recent reports, production of cereals in Mozambique surpassed 1.9 million tons in 2020, registering the biggest increase in recent years.

The Integrated Agricultural Survey released by the Ministry of Agriculture and Rural Development, compared 2020 production with that of 2017, in which just over 1.7 million tons of cereals were produced throughout the country.

Maize was the most-produced cereal in 2020 surpassing 1.6 million tons, followed by sorghum at 142,000 tons and 137,000 tons of rice.

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Merec is backed by Amethis Fund II, a Paris-based private equity fund alongside Proparco and Kibo Fund II, who reinforce the company’s dominant position in Mozambique and expansion into the region.

The family-owned group has developed a strong footprint in the SADC region after it diversified its portfolio from milling to food FMCG including pasta, biscuit and animal feeds.

It is important to note that Merec Industries has previously benefited from US$1.19 million funding from the International Finance Corporation (IFC) to expand its wheat mill processing activities in Mozambique.

Other than private sector players such as Merec who are actively investing the country’s agriculture sector to ensure food security and economic growth, development finance institution, AfDB recently approved a US$47.09 million grant for the first phase of Mozambique’s SPAZ’s project.

To be established at Pemba-Lichinga Integrated Development Corridor in Niassa province, the project is part of the Agro-Industrial Processing Zones that the developmental bank seeks to establish in 18 African countries.

Being a flagship of the bank’s Feed Africa Strategy, the zones will enable agricultural producers, processors, aggregators, and distributors to operate in the same vicinity to reduce transaction costs and share business development services for increased productivity and competitiveness.

Coupled with bringing adequate infrastructure (energy, water, roads, ICT, etc.) to rural areas of high agricultural potential, SAPZs will attract investments from private agro-industrialists/entrepreneurs to contribute to the economic and social development of rural areas.p

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