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Some companies seek investment incentives

Some Northern Region-based companies have asked government to consider introducing investment incentives, including tax waivers, to enable them expand their operations, boost exports and create jobs.

Speaking on Thursday when the Minister of Industry Roy Kachale toured Vizara Rubber Plantation in Nkhata Bay, the company’s manager Yash Sighn said it is challenging to do business in the country that has high transport costs and power challenges, among others.

Coffee is one of Malawi’s export crops

Kachale asked the company to consider adding value to the rubber before being exported.

He said if the company does not have plans for value addition, government has two other options, namely having Malawians pool their resources to form a company or invite foreign investors.

“Vizara will be supplying rubber to that company that will be processing the raw rubber,” said Kachale.

In his response, Sighn asked government to help the company expand its plantation by 500 hectares from the current 2 600 hectares.

The company exports 85 percent of the rubber, with the remainder used locally.

Kachale also visited Mzuzu Coffee where its chief executive officer Bernard Kaunda  said the company is facing financial challenges, making it fail to pay its employees and buy coffee beans from its growers.

The company that produces about 500 metric tonnes (MT) of coffee annually, gets its coffee supplies from 3 000 smallholder farmers from Ntchisi, Misuku in Chitipa and Mzimba. It employs 138 people.

Meanwhile, Mzuzu Coffee is struggling to pay for the coffee, forcing farmers to offer their produce to vendors and in Tanzania.

As a result, the company is losing about 400MT of coffee, representing 40 percent of its total production.

“We delay in paying these farmers and as a result, we are losing part of the production into Tanzania,” said Kaunda.

He said in a good year,  the company exports 450MT of coffee, raking in K1.4 billion.

He said after talks between Mzuzu Coffee and Export Development Fund (EDF), a development finance institution, they have developed a system where farmers will be paid soon after delivering their coffee to the company.

Raiply Malawi Limited and Consolidated Processing Industries, companies that are operating in Viphya Plantation, also asked for tax and export incentives for them to increase output and create more jobs.

In an interview, Kachale said his ministry will discuss with the Ministry of Finance on the suggested incentives to chart the way forward.

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