by Charlie Tryon, Maris CEO
2021 has presented more than its fair share of unpredictability and the often daunting realisation that we are at an age-defining point in time. The ongoing COVID-19 pandemic, localised instability in northern Mozambique and South Sudan, and changing weather patterns delivered by climate change presented us with immediate operational challenges. They also triggered lengthy conversations at a strategic level on the role we have to play as a responsible investor committed to long-term growth in Africa. Despite achieving social and environmental impact on a par with ‘impact investors’, we will not be rebranding ourselves as such just yet. Read more about that in my last blog, here.
Despite the challenges of 2021, we have seen a strong recovery across the group. It looks very likely that we will exceed budget for the year with all 5 divisions having seen good growth in 2021, particularly in the second half of the year. We are set to continue this trajectory into 2022 and are forecasting a record year, by some margin.
Insurgency in Cabo Delgado
Thankfully our team members who went missing in the aftermath of the insurgency in Cabo Delgado all returned safely and the spirit of ‘estamos juntos’ prevailed. We joined forces with Vamoz (Voluntários Anónimos de Moçambique) to donate food and provide support for 743 affected families. The outlook is certainly more promising following the intervention of the Rwandan Defence Force who have cleared the insurgents from their numerous bases along the roads and northern coastal region and scattered them in-land. The root causes of the insurgency remain, but perhaps the rumour UN peacekeeping force will be a sufficient deterrent and allow for the stabilization of Niassa province.
Agriculture, Food and Forestry
Political instability and severe weather events challenged South Sudan once again this year, but Nzara county, where our forestry business Equatoria Teak Company is located remained relatively peaceful and we were able to continue planting trees and implementing the Excelling in Excelsa coffee outgrower programme. Our goal is to rejuvenate a lost industry. One of our farmers was interviewed about it on BBC’s Africa Daily podcast .”It is a sign of hope. And hope is life” he told Alan Kasuja.
Agris launched two new businesses in Nairobi – Evergreen Fresh and Majestic Mushrooms- to service Kenya’s growing middle class with quality, locally-grown fresh produce. Both have grown rapidly and are poised to break-even in early 2022. For the second year running Wakulima Tea Company (WTC) in Tanzania produced more than 6 million kilos of made tea, making it the country’s second largest producer.
Climate-proofing our agricultural operations is critical. A new organic composting project at Evergreen Herbs, taking waste from Majestic Mushrooms and turning it into nutrient-rich compost, is improving soil health and water retention, as well as reducing reliance on chemical inputs. Our vision is to actively manage all Agris food waste by utilising it as animal feed, compost or fertiliser. Evergreen Herbs switched to Sustainable Aviation Fuel (SAF) with Air France-KLM, for export of herbs to Europe.
WTC, Evergreen Herbs, Evergreen Fresh, Majestic Mushrooms and MMO (our managed office space business in Maputo) signed up to the One Carbon World Carbon Neutral International Standard and we are in the process of developing a strategy to reduce the carbon footprint of our whole portfolio in line with science. Watch out for more climate change announcements in 2022.
In our property division, ALP continues ahead of schedule with the construction of phase 2 of ALP West, a grade A warehousing and logistics facility in Nairobi. Phase 1 is now more than 50% occupied and Tatu City, our first site, is more than 90% leased. ALP operates the first EDGE certified industrial buildings in Africa, in line with our commitment to position Maris at the forefront of Africa’s energy transition. We are well advanced in discussions to exit our investment in ALP and hope to close a transaction to sell our stake early in the New Year. Acacia Village, Juba secured a long term contract with the UN’s World Food Program for 17 units, increasing their capacity by 50% to 51 units in Q2.
Equator Energy added 34 new industrial solar projects (10.4 MW installed capacity), which are critical to sustainable economic growth and desperately-needed energy security across Africa. The business has grown exceptionally quickly in 2021, in part due to the pandemic subsiding, unlocking suppressed demand.
In March we launched META Electric, importing Kenya’s first new electric vans. Sendy Ltd, a leading delivery and logistics service provider was the first client. They began as a Kenyan start up and are now an African-wide trade platform, encapsulating Africa’s logistics growth story. E-mobility is an area we are looking at closely in conjunction with our solar business. Entry pricing of electric vehicles and motorbikes remain high, a challenge for penetrating the African market. This will undoubtedly change and we must be ready to capitalize on the opportunity as and when it materialises.
META Group’s footprint increased to eight countries during the year with the acquisition of Kemach JCB, Zambia. Equator Equipamentos EE opened new premises in Matola, Mozambique’s industrial hub, providing clients in southern Mozambique with world-leading brands of construction equipment. In 2022 the group is likely to establish an additional operation in Katanga province in DRC, supported by our Zambia operation. This should conclude our expansion plans in the short term.
Our Mining division was restructured during the year and Mopani Gold was born. This coincided with the restart of Karebe Gold Mine in August, a significant event for us given the dramas we have faced with the company. We have also seen significant progress at Venice Mine where we undertook the first phase of a major plant upgrade in H1. The second upgrade is underway and should be concluded in early Q1 2022. Activity at Commoner Mine has been gradually increasing and 2022 should mark a turning point for the project, finally.