Mozambique: Guebuza Inaugurates Tobacco Processing Plant

Source from:  Agencia de Informacao de Mocambique (Maputo) May 8, 2006 05/09/2006

Mozambican President Armando Guebuza on Sunday inaugurated the country's first tobacco processing plant, in the western city of Tete. Before this factory was built, Mozambican producers had to take their tobacco over the border into Zimbabwe or Malawi for processing. The factory is owned by Mozambique Leaf Tobacco (MLT), a subsidiary of the US-based Universal Leaf Africa Company, and represents an investment of 55 million US dollars. The factory hopes to process and export 24,000 tonnes of tobacco this year, which should earn some 50 million dollars. The installed capacity is 50,000 tonnes of tobacco a year. The factory currently employs 1,600 workers, some on a permanent basis and some seasonal. It covers an area of 64,000 square metres: according to its managing director, Rod Hagger, this makes it the second largest tobacco processing plant in Africa. Tobacco is currently grown by about 80,000 peasant farmers in Tete, Zambezia, Manica, Niassa and Nampula provinces. The growing areas are granted as concessions to companies, including Mozambique Leaf Tobacco, who provide the peasants with inputs and purchase their tobacco. The government has made clear that it favours companies that will add value to raw materials by processing them inside Mozambique. Of the tobacco concessionary companies, only MLT was prepared to build a processing plant. This is why its rival, Dimon (now part of the Alliance One group), lost its concession in Chifunde, the main tobacco growing area in Tete. This was given instead to MLT. Dimon has now pulled out of Mozambique altogether. Peasant producers in Chifunde are not happy, and on Thursday they told Guebuza that unless relations with MLT improve, they will stop growing tobacco. They attacked the low prices MLT offers for their tobacco, and its methods of classifying the crop. MLT officials, interviewed on Mozambican television (TVM) defended their classification, saying that rain had damaged the peasant crop and the tobacco had not been dried properly. The peasants also say that Dimon offered social support, investing in roads and health care in Chifunde, while MLT merely supplies the inputs and buys the tobacco. Enditem