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Jose Parayanken

MOZAMBIQUE - Economy

The Fertile Economy

President, Mozambique Holding

Bio

Jose Parayanken was born in Kerala, India, and studied Biochemistry at Delhi University before acquiring his MBA. He career began at Exim Bank of India where he was in charge of African operations from 1984 to 1989. He later founded Mozambique Holding Group of Companies in 1990, which currently has a capital base of $80 million.

How has the growth of the gas and coal industries determined your sector focus? As investment into the mining sector increases, port and transport infrastructure needs to keep pace with […]

How has the growth of the gas and coal industries determined your sector focus?

As investment into the mining sector increases, port and transport infrastructure needs to keep pace with our competitors. We have therefore concentrated on the engineering opportunities at the port and petroleum downstream distribution infrastructure. There has been very little investment in this sector since the late 1960s, and despite Mozambican ports servicing six landlocked neighbors, we lacked LPG or bitumen terminals and adequate storage infrastructure. The entire Southern SADC Region depends on trucking from South Africa. We have, while upgrading and rehabilitating the Maputo Petroleum Terminal, introduced LPG and Bitumen Terminals, and are in the process of constructing storage facilities in association with Petromoc. We are doing the same in Beira port and propose subsequently to repeat it in Nacala port, too.

Do you feel that the commercialization of agriculture has the potential to be a major driver of economic growth?

Around 70% of Mozambicans are rural sustenance farmers who do not produce in commercial volume; hence, they do not contribute to the formal economy. The challenge for the government is to educate these farmers, while creating and providing the infrastructure for commercial agriculture. This is so that within the medium term, rural Mozambicans become contributing members of the economy. Commercial agriculture has two important elements, the corporate sponsored large farms and the local entrepreneurial smallholdings. The large farms are important in providing initial investment to create the agricultural infrastructure and to employ the population on a large scale in economically productive activity, thus ensuring equitable growth. Then again, there has to be a balance between food crops, such as grain and beans, and cash crops like rubber, coffee, and oil seeds. Food crops are not commercially viable without government subsidies due to developed countries budgeting for a cheaper food bill for their large urban populations through agricultural support.

What are Mozambique Holdings’ initiatives in the agricultural sector?

We have acquired 10,000 acres of land in Zambezia Province and are introducing rubber cultivation to Mozambique. After due diligence, we developed a nursery with technical assistance from the Rubber Board of India to plant 2,000 plants as a pilot program two years ago. Since the progress of these plants is satisfactory, we have expanded the nursery and are planting a further 20,000 in 2014 and have budgeted to plant 1,000 acres over next five years. Since the process requires a large number of workers, we improved village conditions by providing an elementary school and a health center. We also employed all the able bodied villagers, numbering over 600 and created a 200 acre pigeon-pea farm, which is the common local crop that the villagers are skilled in cultivating. We will add further workers over time and teach them rubber-planting skills as we progress and introduce one or two more short-term crops, such as turmeric and ginger, to balance the cash flows, since rubber is a long-gestation crop.

What makes Mozambique an attractive destination for international investment?

Mozambique has a land area twice that of Germany and a coastline of 2,400 kilometers with a population of just 20 million. It has vast arable land with ample water sources and stable ground water, offering vast agriculture and fishing opportunities. Mozambique’s mineral and energy potential are well documented, and the country was the largest tourist destination during colonial times. Moreover, Mozambicans have been exposed to foreign cultures due to the country’s long coastline. Mozambique is welcoming to overseas initiatives in entrepreneurship and technology. The government has also been actively promoting international investment to develop its resources and employ its people productively.

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