Firm plans to invest in  macadamia processing

Local firm Gala Investments plans to invest $20 million (about K34 billion) in macadamia nuts cracking machine to support the crop’s value chain and grow exports.

The World Bank has since said in its latest Country Economic Memorandum that Malawi, with 10 000 hectares could become top 10 exporters of macadamia nuts globally with Gala Investments plans.

Reads in part the bank’s report: “This increased yield will require continued support for cracking nuts and related infrastructure, livelihood alternatives for households around estates to deter theft and conflict and a stable macroeconomic policy environment that enables continued importing of materials needed for investment.

“This will help to ensure the ability of key value chain actors to engage with smallholder farmers.”

In December last year, Old Mutual Investment Group (OMIG) said it had secured a pari passu agreement from AGRI3 Fund, a blended finance fund providing partial risk guarantee and credit enhancement instruments, to support a $12.5 million (about K21 billion) loan to Gala Investments to support the company’s operations and expansion.

But in an interview yesterday, OMIG managing director Mark Mikwamba said it was the intention of Gala investments to invest in a macadamia cracking unit, but stressed that his company was still waiting for feasibility studies.

He said Gala Investment is also negotiating with other investors to secure funding for the facility.

In an earlier statement, Gala Investments founder and chairperson George Tselingas said they believe the firm will “become a pre-eminent macadamia producer in Africa with the potential to become a globally recognised retail brand”.

The firm, which was established in 2021 and operates on 6 000 hectares with over 3 600 hectares of irrigable land across 12 estates in Lilongwe, has been securing funding to boost production and productivity on its farms.

Reacting to the developments, National Planning Commission spokesperson Thom Khanje yesterday said the initiative, if it materalises, would complement the country’s long-term development strategy, Malawi 2063, which is anchored on boosting agricultural productivity and commercialisation.

He said: “National Planning Commission is aware that Gala Investments has ventured into large-scale macadamia nuts production and the venture in the shells processing enhances the investment into an end-to-end integrated venture that adds value to the whole line from farming to commercial utilisation of shells that would otherwise be disposed of as waste.”

Mzuzu University agricultural economist Christopher Mbukwa said yesterday the expected investment would help the country improve its use of marginal land and pave the way for value addition.

He said: “One of the biggest challenges is that the arable land available for production is shrinking because of population growth.

“Investing in perennial crops that grow in relatively unfavourable conditions will help improve efficiency in how we use land.”

The World Bank has also touted the macadamia nut value chain as a potential foreign exchange earner to narrow the trade imbalances created by the drop in tobacco sales in recent years.

Tobacco remains is the country’s main foreign exchange earner, contributing about 60 percent to the country’s foreign exchange earnings.

During the last tobacco selling season, Malawi raked in $282.6 million (about K480.4 billion) from tobacco.

Based on the current trends and assuming an average production of 250 kilogrammes of macadamia nuts per hectare each year, Malawi can generate up to $300 million (about K 510 billion) from the crop each year, according to the World Bank.