Africa Connected

Why some consumer goods in Mozambique are not so fast moving

Travelling through Mozambique, Nikiwe Bikitsha sits down with ADC SA’s Chairman – the country’s biggest fast moving consumable goods company to discuss the challenges brought on by the current state of the economy.

In 2013 a flourishing partnership blossomed in the fast moving consumer goods sector (FMCG) between Africom Lda. and Delta Trading & Companhia Lda. and the companies decided it was time to merge.

Together, they control the commodities market and also have exclusive partnerships, agencies and distributorships with global firms like Vodafone/Vodacom, Coca Cola, Unilever, Goodyear, and Pirelli.

Dominating the FMCG industry, the group worked toward advancing private sector development to aid the rebuilding of livelihoods, creating jobs and generating income in fragile areas.

But by 2015, the economy began slipping and whilst the central bank’s fiscal policies were put in place to control inflation, it was hurting businesses and caused an increase in the interest rate, which in turn was passed onto the consumer.

The consumer’s pocket is not elastic. The disposable income is not great.

Mhamud Charania, Chairman of the Board of Directors at ADC

One of the other challenges that arose was the country’s logistical problems. Transporting goods, whether by truck, railway or sea freight is extremely expensive and in turn, the company now has 70% of its products imported from other countries.

Freight costs make the product too expensive and sometimes, it’s better to import a product from another country rather than bringing it from within your country.

Mhamud Charania, Chairman of the Board of Directors at ADC

Charania makes the point that whilst the country has all the resources that it needs, along with good infrastructure, a heavy investment in logistics is needed.

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