Malawi tobacco firm ready for PPP
Nyasa Manufacturing Company (NMC), Malawi’s sole cigarette maker, says it is ready for a public private partnership (PPP) that will enhance the company’s manufacturing to utilise about 15 percent of Malawi’s tobacco.
Malawi President Joyce Banda, in her State of the Nation Address at the opening of the budget session of Parliament in May, hinted that government is in discussion with NMC to enter into a PPP for the expansion of the firm’s cigarette manufacturing plant.
NMC chief executive officer (CEO) Konrad Buckle told Business News on Wednesday that under the PPP, the company will establish a cut rag and filter manufacturing plants, and expand its cigarette distribution network to 10 countries in the region.
“A cut rag is a plant that takes packed blend of tobacco and cuts it to become a final product that is put into a cigarette. Currently, we tend to export our blend for cutting to Zimbabwe.
“What we also want to do with a cut rag is that we can value add by cutting Malawian tobacco for various tobacco merchants before they actually export it and cut it somewhere else,” he said.
With these processes, Malawi will be in a position to generate the much-needed foreign exchange to boost the country’s forex reserves.
Buckle, who is also a tobacco farmer, said there is business in the region to export cigarette filters to small factories.
He said Malawi, as the largest producer of burley tobacco in Africa, needs to have the capacity to turn raw tobacco into a finished product ready for export, a development that could increase employment levels and sustain the tobacco industry.
“What we want is to eliminate all the price differentiations on burley and flue cured tobacco by creating an additional market for Malawi producers,” he said, adding that they conducted research for three years on how the project will be implemented.
Under the partnership, government will facilitate an Indian Government grant for the required machinery and the company will tap capital from the $50 million Export Development Fund (EDF).
The Malawi Investment and Trade Centre (Mitc), the country’s one-stop investment hub, is facilitating the investment alongside other government agencies that include the Office of the President and Cabinet (OPC), Ministry of Finance and Justice.
Mitc CEO Clement Kumbemba, who said in an interview on Wednesday said that this is a strategic investment, noted that discussions are underway on the modalities on how the partnership will be structured.
NCM currently employs approximately 200 people and with the initiation of the PPP, it is expected to employ about 600 employees.
