SEF Merec II

completed

Merec Industries Lda (or the company) was founded in 1998 and began producing maize meal and coconut oil in its new factory erected in the Maputo suburb of Machava in January and September 1999 respectively. In December 2000, IFC approved and signed a guarantee to help finance the construction of the wheat mill in Machava-Maputo (Project Number: 10185). The project is successful and achieved 100% of its production capacity two years ahead of appraisal projections. Merec II is a project for the expansion of Merec Industries Lda’s wheat mill processing activities in Mozambique. Merec intends to build a new wheat mill including grain storage silos in Beira, the capital of Sofala Province and the second largest city in Mozambique. A new 140tonne/24h Buhler mill and silos with storage capacity of 12,500 tonnes will be installed in new buildings, with production scheduled to begin in 2005. Following Merec’s success with the first project in Maputo, the company management decided to test the market for Merec’s products in the Beira region to the north of Maputo using a portion of its output from the Maputo wheat mill plant. The good quality of the product and the reliable distribution of Africom (a distribution company owned the sponsors of Merec Industries Lda) have contributed towards the success of this experiment in Beira. Merec is now selling 12,000 tonnes of flour per year in this area but is experiencing demand for this in the South so that once the Beira project is complete there will be no problem switching back. The opportunity in Central Mozambique will be fully exploited through this expansion project.