As part of its monitoring of company performance, the Confederation of Economic Associations of Mozambique (CTA) today visited MEREC, one of the country’s main flour and wheat product factories. The visit was aimed at assessing the challenges faced by the company, especially in the context of the shortage of foreign currency in the national financial market, which has impacted the process of importing essential raw materials.
During the meeting, Gilberto Cossa, MEREC’s CEO, pointed out that the unavailability of foreign currency is making it difficult to purchase raw materials on the international market, putting the company’s production capacity at risk. “If this situation persists, we run the risk of not being able to supply the market during the festive season, which would directly affect the population’s basic food basket,” warned Cossa.
In addition to the shortage of foreign currency, MEREC faces other difficulties, such as the massive influx of unfortified corn flour onto the domestic market and the import of pasta at prices below the cost practiced on the international market. Logistics is also a problem, aggravated by the congestion of trucks in front of the factories, especially in Beira, and the difficulty of exporting to some SADC countries due to trade barriers. Another concern raised was the lack of VAT exemption for products such as pasta and cookies, which are considered basic necessities.
MEREC has plants located in Matola (Maputo province), Beira (Sofala) and Nacala (Nampula), with a total production capacity of 2,600 tons per day. The largest plant is in Beira, benefiting from its proximity to regional markets such as Zimbabwe, Malawi, Zambia and South Africa. The company also has plans for local partnerships, such as negotiating with the Moamba Producers Association to supply corn in the southern region, as a way of reducing dependence on imports.
With a total workforce of 669, MEREC is investing in technology to modernize its operations and remain competitive.
During the visit, the CTA reiterated the urgency of adopting measures to alleviate the shortage of foreign currency. Among the recommendations presented to the Monetary Authority are the reassessment of the Compulsory Reserves rate, currently set at 39.5% for foreign currency, and the injection of part of the Net International Reserves into the financial market. These measures aim to strengthen the confidence of commercial banks and increase their capacity to support Mozambican companies, such as MEREC, in obtaining foreign currency to ensure the normal running of their operations.
