Interview with Rui Brandão: Overview of TECAP, Sodil and Adicional

Interview with Rui Brandão, Business Developer at TECAP, Sodil and Adicional

Could you give us some information about TECAP and tell us what you are trying to build with it?

We basically seek to invest in companies with significant potential, which applies to all the companies we are involved with. In the past, our focus was mainly on start-ups. Nowadays, we are investing more in companies with a good track record, but also with plans to expand, or which are looking to grow into new areas. It’s mostly about the potential.

TECAP (Tecnologia e Consultoria Agro-Pecuária) is probably one of the biggest players in the agricultural sector in Mozambique, with a 25-year track record in supplying inputs and equipment for agriculture. We have a very interesting plan to grow the brand and the concept of ‘Casa do Agricultor’ (i.e. farmer’s house) across the country, in order to provide solutions to farmers and allow them to buy inputs, receive technical assistance and have access to mechanization, as well as helping them find a market for their products. Our plan is to establish 40 shops over the next 40 months; which is very challenging, but we believe that agriculture is the way forward for Mozambique and we want to be part of it.

How do you plan to get people to invest in 40 locations in such a short time frame? What are your arguments to convince them?

We have all the capacity in place to organize the logistics, we have the brands and we have done it ourselves. We are managing a shop with the Casa do Agricultor brand, which has been successful, and people who would like to come on board on a franchise basis have approached us. That’s essentially our model, and we have several potential entrepreneurs on a waiting list to work with us. I have to admit that it’s ambitious, but it’s worth a try.

Aside from having the shops, you are also planning to do something about the production, right?

There are plenty of theories about the development of agriculture in Mozambique. But, essentially, our experience tells us that, if people have quality inputs and are able to grow their operations, with access to markets, as well as mechanization, they will be successful. All of these three areas are capital-intensive, so that’s where we want to come in. We are confident that this, along with serious technical assistance, will provide for the markets, the yields and farmers’ capacity to grow, thereby ensuring the model’s success.

Across all these companies, we have a target of growing revenue at a rate of 30-40% per year. All of them benefit from good and consistent management. We also want to grow our teams and empower the people who are coming on board.

Do you plan to export the production?

We need to sort out the market. We can export and we can also work towards having the necessary volumes to supply national industry. I would be happier if I could organize the logistics and sort out the market, in such a way as to find a local solution that would add more value to the raw materials. But if this doesn’t happen, we will need to work on an export-based solution.

Now, let’s talk about Sodil. Could you give us a brief description of the company and what is your main challenge?

Sodil is also a company with a good 15-year track record in Mozambique, as the market leader in some product lines, such as body perfumes. It is present throughout the country, in terms of formal distribution, which is why we found its network to be very interesting. For instance, if tomorrow we could have beans packed in Mozambique, we could easily distribute them, given that Sodil would provide us with a ready distribution chain.

The biggest challenge is to grow. We need more representations. We are open to all kinds of products, whether locally produced or imported. That’s the biggest challenge.

So you are looking to attract brands that would be interested in hitting the Mozambican market.

We don’t only want to sell products. We want to build brands, which is completely different. To build a brand, much more involvement with the producer is required; i.e. we need to have a long-term plan with the brand’s owner, we need their support, as well as defining a proper strategy for the Mozambican market. It’s far more than simply selling products.

There are some other names that can be appealing to brands in terms of distribution. Why choose you over other distributors?

Of course there are other distributors out there. We take care of the brand in our own way. We like to operate in terms of niches and, as far as formal distribution goes, it is very important to go and see what’s out there in the supermarkets and how the brands are present. I believe we do a very good job in that sense. If you visit any supermarket here, you can see who the best distributors are, and I think that’s something we do very well.

Adicional is another company where you are strongly involved. Again, could you give us some background on that, and tell us what you are trying to achieve?

Adicional is a company with very strong experience and know-how in the field of logistics. They are present in four different countries: Portugal, Spain, Angola and Mozambique. We are now Adicional’s partners in Mozambique. Adicional has the capacity to do many different things on the logistics side. For instance, they can offer clients complete outsourcing of stock management and distribution. Let’s say you are in France and have a website; you can promote your website in Mozambique through the Internet and we can do everything for you. But we can also be a bank’s internal couriers, or we can even help you outsource your entire distribution. That was the basis for our interest in Adicional. If you have an office and you need to store one or two pallets for a certain period of time, we can also do that for you.

What is the level of acceptance by the market at the moment?

We are approaching the market by levels. At this point, we have mostly been approaching banks and companies with similar profiles, and we have had very good levels of acceptance. On the distribution side, some potential clients are a little sceptical, because they feel this is too important an area for them and they want to manage it themselves. But I’m sure that as soon as we show what we can do, they will feel safer about outsourcing it than having it in-house.

I think distribution companies can sell much more if they don’t have such a heavy operation; and you can be much more efficient in terms of logistics as the scale grows, so that’s what we want to do.

At this stage, Adicional is really strong on the stock management side and also technologically. Operations in Mozambique and Angola started only this year, so it’s very difficult to say where we are strongest. But in Portugal, the company has done well across all sectors, and is particularly strong when it comes to capillary distribution; but it’s also very strong in catering to the banking sector.

Where would you like to be in 2 or 3 years’ time? What is your dream scenario for all these companies?

Across all these companies, we have a target of growing revenue at a rate of 30-40% per year. At this stage, that’s what we are aiming at. All of them benefit from good and consistent management. We also want to grow our teams and empower the people who are coming on board, for instance with Adicional. We need a lot of people and we need to train them.

Therefore, we don’t expect much, beyond the growth of these companies over the next 3 years. We had a recent experience with starting a company and selling it in just 3 years, but we no longer want to do this within such a short cycle. We are looking at more prolonged cycles now.

Do you intend to attract investors?

That’s something that is not in our plans at this stage, so we are not looking for investors immediately. But it’s certainly something that we see happening in a couple of years or so. Receiving more institutional investment is definitely something we have in mind over the next 2 years.