TECAP: Investment Opportunity in the Agriculture Sector in Mozambique

Interview with António Fagilde, Chairman of TECAP (Tecnologia e Consultoria Agro-Pecuária)

Could you give us an overview of TECAP?

TECAP is a company which was founded in 1989 by 3 partners, 2 of them working in the Ministry of Agriculture and a Brazilian, who brought some agricultural equipments from Brazil. When TECAP was created, the agricultural development was incipient. At that time, the country’s difficulties didn’t allow us to develop any further than what we did. But these last few years we have managed to gather knowledge, people, etc. We started with 5 people and now we have a team of 85 people. We employed nationals and we trained them. We also decided to modernize the company by computerizing the office and preparing the workers. We created 2 distinct guidelines to assist the agriculture sector: one for machinery and the other one for organic agriculture.

One of the focus is called Casa do Agricultor, which is a store where farmers will find technical assistance as well as several agricultural products, sort of like a supermarket. We also have a truck for Casa do Agricultor that distributes to farmers who cannot come to the store because they live in remote areas. Then we started to create smaller Casas do Agricultor around the country, to provide products to farmers in other cities and distant areas. We have decided to create 3 levels of stores: 500 m2 level A stores which will be inserted in provincial capitals, 200m2 level B stores which will be inserted in districts and 100m2 level C stores which will be inserted in rural areas. In the future, these 3 levels will reach the whole country, even in the most remote areas. Of course we will aid our partners upon the implementation of the stores and we will train employees here in Maputo.

What is your goal?

When we surveyed the people, we realized that there was the need for 40 stores and the challenge would be to have them up and running in 14 months, as the need for these stores is quite urgent. About 75% of the suppliers are based in Maputo. So, first we would start with the central provinces, which only have about 20% of the suppliers in the country. The 10% remaining are scattered in remote areas around the country.

We have decided to create 3 levels of stores: 500 m2 level A stores which will be inserted in provincial capitals, 200m2 level B stores which will be inserted in districts and 100m2 level C stores which will be inserted in rural areas.

Currently, TECAP possesses the know-how, the experience and the diffusion network, but has no capacity to step forward without partners. In these 14 months, we will mainly need financial support, as well as the enlargement of our human resources. That is what we expect from our partners.

How much do you believe would be needed for the whole project?

To create the 40 franchises and warehouses, either creating them from scratch or adapting them, we need to invest in infrastructure and supplies. To give you an idea, in our current facilities in Maputo, we have about 2 million dollars invested in merchandise and supplies only. Regarding infrastructure, if there is the need to build from scratch, the investment would be around 8 million dollars. Plus there would be the need for 1 or 2 big trucks branded Casa do Agricultor to deliver the products around the country, which amounts to around 200.000 dollars per truck.

These investments would be a healthy leverage to help agriculture to grow in the country. This is a vicious circle: farmers can’t produce because there is no input, and there can’t be inputs without production, so we need to break this cycle. Moreover, there is the need for agricultural equipment, like technical services and inputs from agricultural implements, such as seeds, fertilizers and small equipment to develop small agro-industries. And these small agro-industries need stores closeby to be able to rent tractors, mills to make flour or threshing machines for rice.

Why should potential investors work with you?

We are specialized in importing, selecting and distributing such products here in Mozambique. We have been working in this area for 26 years and we are qualified, which means that if a company in the same field tries to imitate our growth and techniques, it would most probably close the next day. Besides, other companies would not be able to offer products at a cheaper price than ours. We work with big retailers in China and we import products with our brand name on, which means we already possess our own branded products. When buying in big quantities, the farmers pay less. Furthermore, when people go to a supermarket they know what to buy, whereas in the field of agriculture there is the need for technicians who can explain maturities, product qualities, how to store, etc., and we have such people.

Are you interested in distributing more brands?

Yes we are. We would like to be contacted by more brands for us to improve our offer.

Do you face competition?

We have competitors, which in a way we consider partners. Sometimes we buy products from them and they buy from us. TECAP is the only retailer which offers all types of products to the farmers, so there is not a big competition. For example there is a store that only works with agrochemicals. It is the best in the country and we buy agrochemicals from them. There is another one for tractors only, etc. In summary they are all specific, but we have everything.

Where do you see TECAP in 2 years?

We hope TECAP will be a holding with many companies working in the field, all around the country. As a holding, we would only work with management, finance, HR, etc., and promote other companies, improving them, training the workers, etc. Maybe we would try to enter other complementary markets as well.