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October 2014 FREIGHT & TRADING WEEKLY MOZAMBIQUE READY, STEADY... MAPUTO GOES FOR GROWTH CUSTOMS MAKES SMOOTH MOVES HOW CASHEW NUT SHIPPERS GOT CRACKING © 2008 United Parcel Service Deliver more Deliver Toll free number: 0860 877 772 free Toll IT’S PEACE OF MIND FOR YOU & YOUR CUSTOMERS & PEACE OF IT’S MIND YOU FOR UPS are the world’s largest express carrier. We have 100 years of From service international and freight the to widest small portfolio packages, of you shipping can solutions. rest assured that when we’re on the job there’s nothing to worry about. IT’S NOT A BADGE A NOT IT’S MCCANN ERICKSON 116542 FTW1473SD CONTENTS www.ftwonline.co.za ozambique is a country full of (mostly) pleasant surprises. There was little talk 10 years ago that it would become a major energy producer. Or that we would see vehicles made in Mozambique. Logistics companies best positioned in the Mmarket are those with their feet on the ground – and readers of FTW, the only freight publication to invest in regular fact-finding visits to SADC countries. FTW’s Africa correspondent, Ed Richardson, reports. Cashew processing in Nampula province, Mozambique. Photo: Ton Rulkens Port of Maputo Photo: Cover Design: Zoya Lubbee Editor Joy Orlek Consulting Editor Alan Peat GENERAL NEWS SEAFREIGHT Assistant Editor Liesl Venter 2 Journalist Adele Mackenzie MODERNISING LOGISTICS HELPING SHIPPERS TO MATCH GROWTH Photographer Shannon Van Zyl 3 18 SAVE COSTS Advertising Jodi Haigh (Manager) Yolande Langenhoven Publisher Anton Marsh SMOOTHER CUSTOMS OPENING NEW Correspondents 8 STREAMLINES BUSINESS 20 REEFER MARKETS Africa/Port Elizabeth Ed Richardson Tel: (041) 582 3750 Swaziland James Hall CONNECTING SMALLER [email protected] AGOA BOOSTS US TRADE 10 22 PORTS TO THE WORLD Advertising Co-ordinators Tracie Barnett, Paula Snell CASHEW SHIPPERS Layout & design Zoya Lubbee GET CRACKING Circulation [email protected] Printed by JUKA Printing (Pty) Ltd Annual subscriptions Combined Print & Internet - (SA only) R560.00 LOGISTICS Southern Africa (Free Internet) - R1000.00 6 12 International Mail (Free Internet) - R1280.00 14 COOKING WITH GAS Publisher: NOW MEDIA Phone + 27 11 327 4062 Fax + 27 11 327 4094 NEW LOGISTICS FACILITY E-mail [email protected] 28 OPENS IN BEIRA Web www.ftwonline.co.za Now Media Centre 32 Fricker Road, Illovo Boulevard, PORT/RAIL RAPPORT BUILDS Illovo, Johannesburg. 32 CONFIDENCE PO Box 55251, Northlands, BEIRA NO LONGER MAPUTO PORT READY 2116, South Africa. JUST A FEEDER PORT FOR MORE VOLUMES 10 years of facilitating trade and transport on the Maputo Corridor www.mcli.co.za FTW7093 October 2014 Mozambique 1 www.ftwonline.co.za How Mozambican cashew nut shippers got cracking complex supply chain with the farmers and government producers with greater which starts with a to replace 40-year-old trees bargaining power, and from million shippers – and to expand the area under a logistics perspective help A each with less than production. consolidate loads. 100 kilograms of fragile and Another important step was Finance for modernisation time-sensitive freight – is needed to address the cashew nut value and investment in processing to fill snack bowls and add an chain. At that plants is being essential ingredient to curries time the market provided and stir fries around the world, was dominated through the Mozambican farmers are also the Mozambican cashew nut. by two to three African Cashew benefiting from the Fairtrade A combination of civil war, middle-men. initiative (ACi), initiative. ageing and ailing trees and They controlled Co-operatives provide which created Nuts are packaged by policy missteps resulted in the the prices and producers with greater a Cashew Liberation Foods in the UK virtual collapse of the industry the logistics bargaining power, and from Matching Fund and distributed through that once accounted for around chain, which a logistics perspective help to accelerate the retailers Tesco and Sainsbury’s under their own brands, as 240 000 tons, or 30% of global created losses consolidate loads. development cashew nut production. By of 5% or more “ of the cashew well as through Waitrose, 1990/91Mozambique’s share of through poor industry by Traidcraft, Oxfam and Greencity world exports had fallen to 2.8%, handling. allowing public Wholefoods under the Liberation or just 22 000 tons. Cashew nuts are brittle, and and private investments to benefit brand. It was around this time that “brokens” have relatively little farm productivity and farmer Thousands of jobs are again international agencies and market value. income. being sustained at source businesses started intervening, American NGO CLUSA A key element of the initiative by the processing of nuts in and production has grown (Co-operative League of is to increase transparency along Mozambique. A series of policy mistakes first saw 98% of the back to 100 000 tons. USAID the United States) started the value chain through the use crop being exported raw to India describes the Mozambican empowering the farmers of laptops and smartphones. after the government – on the cashew industry as a pyramid. by helping them to form Productivity has increased by an recommendation of the World At its base are a million farmers co-operatives. These provide average of 30%, according to ACi. Bank – lifted all restrictions on with an estimated 18 million the export of raw product. trees in the country’s north- Indian processors could pay eastern regions, which have more than the Mozambican poor roads and little logistics factories, and by 2000 the last infrastructure. one had closed. On the plus side, Mozambique Processors returned to the has natural advantages, market in 2002 using more according to John Sutton, modern equipment and with the Sir John Hicks Professor technical support from Tech- of Economics at the London noServe (USAID). School of Economics. It begins This rebirth of the industry is marketing nuts in the October– supported by the government’s December period, when the rest INCAJU initiative, an integrated of the world is not producing. strategy based on cooperation The main market for raw cashew between the private sector, nuts is India, followed by government, non-governmental Vietnam and Singapore. organisations and communities. The most important Government funding is destinations for processed provided for the purchase of cashew nuts are the United fungicides and pesticides for States, the European Union, the treatment of cashew trees, South Africa and, more recently, and for the establishment of Saudi Arabia and Lebanon. Total processing plants. annual exports are valued at In addition, a surcharge of 18% around US$70 million. of the FOB price is imposed on Logistical challenges start at raw cashew exports. Some 20% source, with the average annual of revenues from the surcharge yields of trees being only 1-3 kg, are allocated to the development according to aid agencies. One of programme of the local industry. Cashew nuts and peanuts on sale in the main Maputo market. the first interventions was by the Exports of raw cashews are Dutch development agency SNV, also banned from October to which in 2002 started working December. 2 Mozambique October 2014 Mozambican logistics modernises to match economic growth Photo: Andrew Moir Andrew Photo: Ed Richardson as brands, synergies, human now staffing them with young stiff competition from other ozambique’s window resources and restructuring. and hungry leaders who have harbours in the region. of opportunity for They are reinventing been carefully schooled in group Importers and exporters in logistics companies themselves because the strategy, systems and objective. Zambia, Zimbabwe, Swaziland, Mthat do not already Mozambican business Their country managers are much of Mozambique and have a strong base in the country environment is modernising no longer just managing, but Malawi all have a growing is closing fast. fast. are responsible for driving the choice of ports. So fast that companies new “Mozambique’s transition business. That choice has been created to the country are finding from a post-conflict country This is good news for shippers by the hauliers whose fleets it extremely challenging to to one of Africa’s ‘frontier and cargo owners because operate the length and breadth establish themselves. economies’ has been nothing everyone along the logistics of the sub-region. Over the past five years or short of impressive,” is the way chain is upping their game. New electronic customs so FTW has seen the logistics the World Bank describes the Mozambique’s economic systems make it easier and sector in Mozambique mature changes. growth of 7% in 2013 was led by quicker to cross borders, and from what could best be Shippers and cargo owners transport and communications, the road infrastructure is being described and understood as now expect logistics companies financial services and extractive improved. pioneering frontier companies in Mozambique to have the same industries, according to World Satellite and cellular networks which attracted business simply systems in place as are found Bank statistics. make it possible to track cargo by having a presence and some anywhere else in the world. What is interesting in the every step of the way. systems in place to one where Multinational logistics bank’s analysis is that it puts Knowing this, customers companies are in the process of companies have also been mining after transport and now want to be able to trace the re-engineering themselves. attracted by the promise of a communications as the main progress of their loads online. For the first time this year the boom driven by oil, gas, coal and economic drivers. There is simply no place to hide FTW team heard the heads of agriculture. The ports, which are for inefficient hauliers, freight Mozambican logistics companies Many have had offices in the independent of each other, forwarders, warehouse operators, talking about concepts such country for years, but they are understand that they face port authorities or clearing agents.

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