Overview on a Selected Investment and Trade Opportunities

United Kingdom - Malawi Investment Forum

20 th March 2013 Clement Kumbemba,CEO Malawi Investment and Trade Centre (MITC) [email protected]

www.malawi-invest.net

Introducing Malawi

“The warm heart of Africa!”

Second most peaceful country in Africa: Global Peace Index 2009 Stable democratic government English-speaking and growing managerial work-force Key figures Population 15.4m

Population growth rate 2.8% Rural population Urban population 80% 20% GDP GNI per capita Exchange rate $5.6bn

$360 $1 = MWK 383 (at 10.03.2013)

Rationale for Malawi

• Political Stability and Peace • Security of Life and Property • No History of Civil War and Peaceful and Democratic Government Changeovers.

• Peaceful Co-Existence among Different People • Free Repatriation of Profits, Dividends and Loyalties • The Second Most Peaceful Country in Africa as Rated by Global Peace Index in 2009.

Private Public Partnership (PPP) in Malawi

o The PPP Act Number 27 enacted in November 2011.

o PPP Arrangements fully provided for in the PPP Act o Functions and Obligations of contracting parties fully provided for in the PPP Act o Security of investment, issues of dispute handling are adequately addressed in the PPP Act

Investment Projects

Project Name

: SUGAR CANE FACTORY IN SALIMA

Project description

: Development of Greenfield sugarcane production and processing facility of 6,000 hectares under irrigation farming.

Project Promoter

: Green Belt Initiative (GBI)/Malawi Government

Investment requirements:

US$70m (Made up US$42m for developing land, US$19m for machinery and US$9m for inputs, training and market development).

Mode of Partnership

: Public-Private Partnership

Project Name

: SHAYONA CEMENT CORPORATION LIMITED

Project description

: Expansion and Modernization of the Cement Plant

Product/Services

: Cement Production under the "Akshar" brand name.

Turnover:

US$5m-US$20m Feb 2013

Investment requirements :

US$51million of which US$27 million the financing gap. The Promoter will inject US$24million in the form of equity.

Mode of Partnership

: Debt financing/Loan

Project Name

: AFRISEED LIMITED COMPANY

Project description

: Seed multiplication using social entrepreneurship model and working with rural women farmers.

Product/Services :

Legumes seed production, quality seed distribution, grading service and packaging, hiring out of farm equipment to farmers

Turnover :

US$5m-US$20m

Investment requirements :

US$20million

Mode of Partnership

: Equity and Donor financing. Donor funding under the women groups for training, sourcing of private sector extension services, mobilization of women groups and skill transfer to the women groups

Project Name

: SUNBIRD TOURISM LIMITED

Project description

: Development of a 25 rooms eco lodge within Liwonde National Park on the Upper Shire River and development of another 25 rooms eco lodge within Majete Game Reserve.

Product/Services :

Hospitality with a chain of 6 hotels

Turnover :

US$14m(2012)

Investment requirements :

US$8million

Mode of Partnership

: Equity finance

Project Name

: NASCOMEX LIMITED

Project description

: Groundnuts Oil Production

Product/Services

: Commodity trading and agro processing. Largest smallholder association in Malawi with a combined membership of over 100,000 smallholder farmers

Turnover:

US$5m-US$20m Feb 2013

Investment requirements :

US$5million

Mode of Partnership

: Donor and Equity financing

Project Name

: UNIVERSAL INDUSTRIES LIMITED

Project description

: Production of high quality cassava flour (HQCF), potato multiplication, production of soya textured products

Product/Services :

Quality Biscuits, Confectionery, Savoury Snacks, Beverages, Powdered Milk, Maize Products, High Quality Cassava flour (HQCF),Green Coffee, & Potatoes.

Turnover :

over US$30million

Investment requirements :

US$7million (US$5 for additional machinery and US$2 million for working capital)

Mode of Partnership

: Debt and Equity financing

Project Name

: RAB PROCESSORS SOY BEANS PROJECT

Project description

: Production of Soya Textured Products .

Product/Services

: Agriculture Related Products

Investment requirements :

US$6million (Largely to acquire oil extraction and refinery machinery).

Mode of Partnership

: Debt and Equity financing

Project Name

: MPATSA HOLDING LIMITED

Project description

: (a) Purchase of irrigation equipment for cash crop farming. (b) Establishment of a commercial Bank (c) Nkhonjeni Intergrated Fish Farming Project

Product/Services :

distribution Farming, real estate, hospitality, advertising, and

Turnover :

US$1million- US$5 million

Investment requirements :

(a) Irrigation equipment -US$7million (b) Commercial Bank – US$5million (c) Intergrated Fish farming – US$750k - US$1m.

Mode of Partnership

: Debt and Equity financing

Investment Prospects

NO PROSPECT SECTOR

1 2 3 4 5 6 7 8 9 10 11 12 Open Open Afriseed Ltd Sunbird Hotels Mpatsa Holdings Ltd Universal RAB Processors Mpatsa Holdings Ltd NASCOMEX LTD Pride Malawi Skyband Company X Agro-processing Agriculture Agriculture Tourism Agriculture Agro-processing Agro-processing Financial services Agro-processing Financial services Infrastructure / ICT Agro-processing

INVESTMENT

Sugarcane Pigeon peas Seeds Eco-lodges Irrigation Soy bean processing Soy beans Commercial bank Input/output marketing Micro-finance Fibre optic cables Groundnuts

APPROX VALUE ($M)

70.0

33.0

22.0

8.0

7.0

7.0

6.0

5.0

5.0

3.2

3.0

2.2

Investment Prospects

NO PROSPECT SECTOR

20 21 22 23 13 14 15 16 17 18 19 BERL Paragon Ceramics Ltd Mpatsa Holdings Ltd Beta Television Energy Tourism/Manufactuing Agriculture ICT Eqnon Electricity Kiosks Tafika Milling Ink It Design & Print Press Naturals Waste Water Environment Namiashi Lodge FES Energy Agro-processing Services Agro-processing Infrastructure Tourism Agriculture & construction

INVESTMENT

Bio energy Lodge & pottery Fish cages Commercial TV station Mobile electricity Maize Printing press Baobab juice Water/waste services Lodge Purchase of Business

APPROX VALUE ($M)

1.3

1.0

1.0

0.9

0.4

0.3

0.3

0.3

0.3

0.1

TBC

TOURISM INVESTMENT PROJECTS

A selection of projects being promoted are as follows: • The development of eco tourism lodges in areas of outstanding natural beauty including forest areas, national parks and small islands on Lake Malawi. Beach front developments on Lake Malawi • The development of hotels and conference centres along the lakeshore and in urban centres • Boat cruises and water sports facilities on Lake Malawi and the Shire river.

• Development of wildlife reserves including restocking, tourism infrastructure • Establishment of casino’s and entertainment centres in the main urban areas

CAPE MACLEAR INTERGRATED LAKESHORE RESORT PROJECT

The Development of an Integrated Resort at Golden Sands, Cape Maclear in the lakeshore district of Mangochi

Aim:

Provide high quality resort within Lake Malawi National Park. This is a purpose-built infrastructure with 100 beds 5 Star Lodge, 150 (4 Star) bed hotel, conference facilities, sporting complex, Champion Golf Course, Quay, Museum, wildlife ranch and underwater aquarium.

DEVELOPMENT OF NATIONAL PARKS AND WILDLIFE RESERVE

Kasungu National Park

This is a priority project which involves the development of existing tourism facilities, restocking of wildlife, enhancement of law enforcement and fencing. Other Parks and Protected Areas earmarked for development include • Nyika National Park • Liwonde National Park • Vwaza Game Reserve • Dzalanyama Forest Lodge

ENERGY PROJECTS

Project Description Kholombidzo Hydro Mpatamanga Hydro Kapichira Phase II Nkula A Hydro(upgrade) Lower Fufu Hydro Potential capacity(MW) Project Cost Estimate(US$ 365 US$410m 310 64 US$310m US$60m 26 170 US$25m US$140m

SHIRE VALLEY IRRIGATION SCHEME

The Project seeks to develop 42320 hectares under PPP framework To undertake feasibility studies To construct irrigation canals To build warehouses, cold rooms and provide utilities To produce and process special crops To establish agro-processing factories To provide road network infrastructure

Trade Opportunities in Malawi

Groundnuts Sugar Dhal Tobacco Tea Pulses (pigeon peas, soya beans, chick peas, kidney beans) Coffee, Maize Macadamia nuts Curios, Handcrafts Gemstones, Timber, Cut-Flowers Cotton, Textiles and Garments, Birds Eye Chilies

Market Arrangements

o COMESA o SADC o EU’s Everything But Arms (EBA) Beneficiary o AGOA beneficiary o Beneficiary to the India, China, Canada, Japan Preferential Markets o Duty free, quota free and preferential bilateral trade arrangements with a number of countries, among them Zimbabwe and South Africa

Investment Protection

o Constitution of Malawi guarantees protection of assets of foreign investors o Member of the Multilateral Investment Guarantee Agency (MIGA) o Signatory to the international centre for settlement of investment disputes o Member of the Africa Trade Insurance Agency of COMESA

Malawi is ready and open for business

Contact us

Malawi Investment and Trade Centre (MITC) P/ Bag 302 Capital City Lilongwe 3.MALAWI

Tel: + 2651770800 Fax: +265 1771781 Email: [email protected]

www.malawi-invest.net