The Business Year

Zubeyİr Değirmencİ

General Director and Member of the Board, Deco Group

José Carlos Pinheiro

CEO, Pylos Mozambique

Luxury residential assets, retail centers, and property management for commercial enterprises are some of the high-potential segments in the market.

How has your company’s business developed over recent years?

ZUBEYIR DEĞIRMENCI established itself here in 2009, although we actually first came in 2007 to conduct market research, before establishing a pavement and block company. It was intially called Akdeniz, a Turkish name. The DECO group is not only engaged in construction, but also operates DECO Stone, which sells construction materials such as concrete, pavement materials, and blocks, while DECO construction is engaged in building. DECO Stone is a factory located in Tchumene with a workforce of 130 that produces and sells concrete. We began by renting a plant, but once this proved insufficient, we had to build our own. All our current production is geared at meeting local demand. Our largest construction competitors buy their concrete from us, which is a clear indicator of our production quality. The DECO residence is a symbol of DECO construction, and is a 23-floor building with three underground parking lots, offices, and 42 apartments. We applied the best quality possible, considering Mozambican standards. The project is now complete and was sold out prior to completion. Assos condominium is a 45,000sqm construction with 160 apartments, 12 shops and two floors of parking, and will be completed within 20 months. The first block should be opened by June 2015 at the latest, and the project has won the African Property awards for best apartments in Mozambique.

JOSÉ CARLOS PINHEIRO We started in September 2014 in Tete with our first strip mall, at 7,700sqm. These are not exactly shopping malls, but more open strip malls. They are not venues for Louis Vuitton or Chanel, but essentially retail services for the mass market. The concept behind this project is to take formal retail to various areas of the country that lacked it before. We are sure of making a positive economic and social impact as consumer prices will tend to decline, and we offer people different purchasing opportunities that they do not have access to today, while introducing a diversity of brands. Currently, people beyond Maputo do not have proper retail options, and this lack of competition favors the retailers. After the Tete development we will probably build our next malls in Nampula, Pemba, Massinga, or Maxixe, and perhaps Nacala. We will have a minimum of two additional projects under construction before the end of 2Q2015. By April-May, we will have three under construction in Tete, Nampula, and Pemba. We estimate our investment for the 15 malls will be in excess of $150 million, with a minimum of another $50 million to $60 million from tenants. We are not a construction company, but a real estate developer, and will therefore develop, rent, and manage the malls.E

How would you describe the quality of human capital in construction in Mozambique?

ZD The skill level remains insufficient. We need to keep our quality especially high for an award-winning project. Now we have a team that we trained during the construction of the DECO residence, but we need more trained workers, which we will bring from Turkey. Sometimes they can just come for two or three months to give training and go back. It is difficult to bring people here for work. The government sets the limit of foreign workers and they should be more flexible.

How would you describe the local business environment for establishing a new company?

JCP Ours is not the easiest market to enter, but you must understand that were this a developed country there would not be the same opportunities to grasp as exist here. Having said this, it is important for an investor coming to Mozambique to understand that this is a country with its own laws, and that if you are fully aware of them, it is not a difficult environment to do business in.



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