Mozambique: Government secures new investors for Xinavane and Mafambisse sugar plants

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Mozambique: Government secures new investors for Xinavane and Mafambisse sugar plants

1:59 CAT | 28 Aug 2019

File photo: Noticias

The government of Mozambique has secured economic, commercial and production alternatives aimed at maintaining operations at the Xinavane and Mafambisse sugar mills in Maputo and Sofala provinces respectively, Noticias reports today.

The guarantee was given by the Minister of Industry and Trade Ragendra de Sousa, who announced that investors interested in the project had already visited Xinavane on Sunday and were set to travel to Mafambisse the next day.

“So we have the situation under control,” Minister De Sousa said in an exclusive interview with Noticias in Ricatla, Marracuene district, where the 55th edition of the Maputo International Fair (FACIM) is taking place.

Asked about recent suggestions that Tongaat Hulett, the main investor, might abandon the two sugar plants, Minister De Sousa said that the government was following developments in the sugar sector closely, and verified that his department was doing everything possible.

It was now up to Tongaat Hulett to say what it wants to keep the units in operation, he said, while noting that “the Mozambican government no longer responds to blackmail.”

“If they want to quit tomorrow, let them declare the value of the equity/assets, and the new investor will come in. We were given assurances that the investor will not delay even one day and will not change the workforce. So, as the government, we have the solution at hand,” the minister said.

De Sousa would not reveal the identity of the potential new investor on the grounds of commercial sensitivity.

“What I can say for now is that there is an investor, and [there are] others interested in both sugar plants. What is lacking is the current investor deciding and saying what it really wants. We as a government will no longer tolerate blackmail,” the minister reiterated.

Information has recently circulated in the media that Tongaat Hulett had already told workers at the Mafambisse sugar mill in Sofala that it was interested in leaving the business, which could put nearly 3,500 people out of a job.

According to the same unconfirmed source, the South African company would pull out of the Mafambisse plant, in which it is the largest shareholder, at the end of the current harvest.

Addressing these such allegations, De Sousa said that that was enough speculation, and that, at this point, it was Tongaat itself who had to tell the government what it was going to do.

Tongaat Hulet holds 85 per cent of Mafambisse and 88 percent of Xinavane.

The Xinavane sugar plant is the largest sugar producer in Mozambique, with capacity of about 250,000 tons per year. In 2018, it produced over 200,000 tons of sugar.

Last year, Tongaat invested about US$39 million in a white sugar refinery at Xinavane which could ultimately save the country from importing the product for the domestic market.

Source: Noticias