The halal-certified abattoir at Chimoio in the west of Mozambique, which cost around $3.5m to build, will be the largest facility in the country, capable of slaughtering 4,000 head of cattle per month when working at full capacity. Throughput is expected to increase incrementally, from the initial throughput of around 200 head per month, which commenced earlier this month, however staff are currently still in training.
The company said that the abattoir will be capable of "servicing the needs of the country, and will dramatically reduce the current requirement for the country to import meat from South Africa.” It has already founded two new butchers’ outlets, in Chimoio and Tete, with a third retail outlet in Beira planned for next year.
The livestock for the abattoir will come from the company’s Mozbife farms and feedlots as well as local smallholders. The Mozbife label is anticipated to provide an uplift in value for slaughtered cattle and beef products, with margins of around 50%, while additional costs associated with processing lower-value locally sourced animals are expected to be raised through the sale of 5th quarter products.
A spokesman said that although the abattoir is halal-certified in order to cater for the Middle Eastern market, in addition to domestic supply, "no exports were envisaged until next year as the company intends to supply the local market first."
She said: “The company has had visits from potential importers from China and Mauritius and the operation and products have been well received.”
The new facilities are part of Agriterra’s major investment in the vertically integrated beef operation, which aims of increase the production of beef to 10,000 head of cattle by 2015, a significant rise on the mid-2012 figures of 4,800 head. Projects have included enlarging the breeding herd at the stud ranch and increasing capacity ready for further expansion, as well as the construction of a dam in order to irrigate the land and extending the acreage of the feedlot to support the expansion of a further 1,200 head.
The company reported an increase in revenue in its beef operations in the year to 31 May 2012, rising to US$895,000 compared to US$55,000 in the same period last year. This helped offset the decline in the grain business, with total revenues across the whole business increasing by US$13.8m. However, operating losses in the beef sector were recorded at around US$2.3m with capital expenditure in the year amounting to $2.3m.
Chairman Phil Edmonds said that the focus over the last 12 months has been on “consolidation, expansion and diversification” in order to provide a “foundation for future sustainable growth and profitability”.
He said: “This is a defining period in Agriterra’s development and we remain concentrated on further expanding our operation, particularly our beef ranching and cocoa plantations, in order to achieve critical mass and sustainable profitability. Our beef operations, which capitalise on traditionally high levels of beef imports into Mozambique from South Africa, have created a new, high quality source of domestic beef for which there is extremely strong demand.”