MALAWI MANGOES M-POWER: A Model for Commercial Expansion and Diversification in Malawi

Project description

Malawi Mangoes is located in Salima district, Malawi. Established in 2011, the Company is a vertically integrated mango production, processing and export business. We source mangoes from a blended supply chain comprising our own anchor Farms (308 Ha), approximately 2,200 smallholder farmers (equivalent of 40 Ha), 9 community owned and managed Community Orchards or “CO’s” (36 Ha) and 14 Small to Medium- scale Commercial Farmers (70 Ha) – all sat within our agricultural and ethical trading certification model.

We process dried and fresh mango for export in our 10,000 m² GMP and Food Safety certified processing facility. Malawi Mangoes currently export fresh Alphonso variety to the Indian and Middle Eastern markets; export is counter seasonal and entering the market when there is no other Alphonso fruit available. Malawi Mangoes gained SPS access to the South African market in 2022 to take advantage of the early availability (pre-December) of Alphonso and Tommy Atkins in Malawi for supply into the fresh and fresh cut (pre-packed mango salad) markets. The planting of later cultivars has extended the mango harvesting season from three months to five months (Factory production up to seven months).

In 2023 Malawi Mangoes established a market and are developing a new value chain for the production and export of an early season local mango indigenous to Malawi (Yembe, Dodo or Mabaloma) which will add another 3-4 weeks to the production season (total of six months harvest and up to eight months factory production). Malawi Mangoes continue to source and trial alternative early and late season varieties to further extend the season and to target additional fresh and dried markets.

We have technical, sales and marketing partnerships with global industry players for the production and distribution of fresh and dried mango to regional and international markets. We employ 200 full time employees (including a field-based Outreach extension team of 13) and up to 1,200 seasonal employees. We are targeting production volumes of 12,000 Mt / annum by 2030, up to 40% of which will be supplied by out growers.

Financial requirements

The M-Power project is expected to provide growers' potential income generation and economic value of USD 750,000 per annum at full production from the supply of raw material to the Company. Conservative yield projections estimate is approx. 5,250 metric tonnes, generating USD 5-7 million per annum in export revenue. For this, at full potential the project foresees:

• Increasing the hectares of land under mango production by at least 280 Ha.
• Developing production zones with five production partners across up to 20 locations, providing diversified source of income and increased resilience for up to 3,150 new farmers.

In terms of cost per Ha of development for the existing five sites, this are the initial estimates:

• Kambwirisele: USD 3,100
• Zibotcho: USD4,500
• Dewa: USD 3,615
• Chiwungwe: USD 5,270
• Mtongola: USD 4,270

For new sites, the cost per Ha is estimated at USD 4,270.

The biggest sub-component of these costs in either scenario is generally in-field irrigation which is around 40% of the total cost.

Other considerations for investors are:

• The critical factor in irrigation development for both new and existing schemes is water availability.
• For the existing schemes, based on the estimated flows, it has been assumed that there is enough flow to irrigate an absolute maximum of 6 ha using supplementary irrigation.
• A 5 ha limit has been assumed for the new sites (assuming 4.5l/s borehole) and this will depend on the yield of the boreholes tests. Should there still be excess water available in future, the new sites could potentially irrigate up to a maximum recommended area of 6 ha.
• Training of the beneficiaries in the new irrigation systems will be a critical requirement for the success of each scheme/site.
• For the new sites, farmers will need to be assisted with setting up their new cooperatives, including amongst other things, taking inventory and accurate measurements of existing farmers and land parcels using suitable survey technology, organisational training, and development of the cooperative constitutions.

Proposed investment model

Malawi Mangoes is seeking funding and development / private sector partners to expand regionally in Malawi and further extend the mango growing season through geographic diversification into different agro-ecological zones by up to 8 weeks. The Company will be managing the M-Power project as it has established sufficient capacity building programmes and extension structures to provide support to the additional mango farmers, and to manage the expansion of businesses alongside interested Production Partners (PPs).

In terms of financing partners, we are willing to engage with the EU and other development partners to explore suitable co-financing arrangements, including through grants and blending opportunities by bringing on board private sector financing. If semi-commercial PPs want to be involved alongside expansion of our existing sites, they should contribute to their developments by means of organizing the land with the smallholders and providing oversight on land development.

Contact

Malawi Mangoes Ltd, PO Box 499, Salima, Malawi

Kambwiri 2 Industrial Area, Off Senga Bay Road, Salima, Malawi

Email : info@malawimangoes.com

Website: https://www.malawimangoes.com/