MALDECO takes recovery mode
Press Corporation plc subsidiary, Foods Company Limited also known as Maldeco Fisheries, plans to invest $17 million (about K17.5 billion) to revamp its loss-making business.
In a presentation during a PCL stakeholder engagement in Blantyre on Friday, Maldeco general manager Andrew Santhe said the money will be invested in the feed mill, new processing plant, fish cages as well as balance sheet construction.
He said following the investment, the firm hopes to increase its annual fish production to 6 000 metric tonnes (MT) by 2026 from 5 000MT. This is against annual fish demand estimated at 11 000MT.
Santhe said: “Our biggest challenge right now is feed availability. We require floating feed which we have been importing from Zambia. However, our progress has been hampered.
“For 2021, Zambia banned all exports of floating fish feed for some months. This year, we started the year well, we were looking forward to cutting the time it takes to mature fish from seven to six months, but came April and May, we were hit by foreign exchange problems.”
He said because of this, the firm withdrew 34 cages of fish production, which contributed to a K2.4 billion revenue loss.
“Plans are on the cards to come up with own feed mill and a potential partner, Run and Milling of Israel, has already been identified and term sheets have already been signed. Once we resolve the issue of floating feed, we will become profitable,” said Santhe.
PCL acting chief executive officer Lyton Chithambo said out of the K17.5 billion, K6 billion will go into the feed mill business.
“This money will come from PCL and partners. The demand for fish is huge yet we are importing a lot,” he said.
According to the Commercial Agriculture for Smallholders and Agribusiness (Casa) Aquaculture Sector Strategy, Malawi does not have commercial producers of floating fish feed although its high protein-conversion ratio makes it the appropriate feed type for aquaculture-based production.
In its April 2020 Country Strategy Paper, Casa said National Aquaculture Centre had installed a feed mill that can produce floating fish feed, but the capacity is too small to support any commercial production needs of smallholder farmers.
Maldeco had invested in a feed mill but stopped using it because it was only producing sinking fish feed, which was observed to have significant performance deficiencies compared with floating fish feed imported from Zambia.
Casa figures show that Malawi’s aquaculture production contributed about five percent to the regional total in 2016 and ranked sixth after leading producer countries, including Zambia, Madagascar, Tanzania, Zimbabwe and South Africa.
PCL financial results for the year ended December 31 2021 show that Maldeco registered a 45 percent increase in losses to K2.9 billion from a loss of K2 billion the previous year.
The continued loss was due to interruption in the fish feeding regime due to supply chain challenges and increased finance costs.
