CHIQUITA ESTABLISHES MOZAMBIQUE AS AFRICA

UNCLAS SECTION 01 OF 02 MAPUTO 001208

SIPDIS

SENSITIVE
SIPDIS

STATE PLEASE PASS USAID/AFR/SA
STATE FOR AF/S

E.O. 12958: N/A
TAGS: ECON EAID EINV ETRD PGOV EAGR MZ
SUBJECT: CHIQUITA ESTABLISHES MOZAMBIQUE AS AFRICA
HEADQUARTERS

MAPUTO 00001208 001.2 OF 002



1. (SBU) This is a retransmission of Maputo 1157, which
previously did not reach all addressees. This cable is
Sensitive but Unclassified (SBU),and contains business
sensitive information that is not for distribution outside
of the USG.


2. (SBU) Summary: Eager to access opportunities created by
the European Union's preferential access programs, Chiquita
is investing in Africa via a risk management approach that
focuses on technical assistance to local banana growers
while limiting capital investment. Chiquita's decision to
locate its African headquarters in Maputo was based on
Mozambique's significant potential and strategic location
able to reach both European and Middle Eastern markets.
Chiquita's influx of technical assistance will give a major
boost to commercial agriculture in Mozambique. Chiquita
currently has operations/partnerships in Ivory Coast, Ghana
and Mozambique and is investigating possible investments
partnerships in Cameroon, Sierra Leone and Angola. End
Summary.

Chiquita Expanding in Africa
--------------


3. (SBU) General Manager (GM) for Chiquita's operations in
Africa Mark Oakley told Econoff that as a result of the
European Union's (EU) African, Caribbean and Pacific (ACP)
and Anything But Arms (ABA) programs, Chiquita made a
decision to start looking seriously at banana and other
product production in Africa for the European market.
After examining Mozambique in greater detail, Chiquita
realized that there is also significant opportunity for the
Mediterranean and Middle Eastern markets given Mozambique's
strategic location. Chiquita currently has a small
operation in Ivory Coast and partnerships in Ghana and
Mozambique. The company is investigating possible
investments and partnerships in Cameroon, Sierra Leone and
Angola. Interestingly, although Chiquita seriously
considered South Africa for its African headquarters, it
decided on Maputo since it will have significant operations
in Mozambique and flights to Johannesburg are easy to
obtain.

Chiquita's Africa Strategy and Mozambique Investment
-------------- --------------


4. (SBU) Chiquita made a strategic decision to invest in
Africa differently than it has invested in Latin America.
Specifically, the company will not invest directly in land
or cultivation, but will be putting capital resources in
technical assistance, innovation and marketing. What this
means practically is that Chiquita partners with a local
investor who buys/leases the land and invests capital in
infrastructure and production, while Chiquita provides
significant technical assistance and purchases the
resulting product.


5. (SBU) In Mozambique, Chiquita is partnered with
Matanuska Ltd., which is held by Rift Valley Holdings
(RVH),a primarily Zimbabwean company with some additional
European investors. Chiquita will establish its African
headquarters with a General Manager for Africa and
technical staff (production, infrastructure development,
water management, irrigation, quality control and human
resources) and will manage but outsource logistics. (Note:
Chiquita has already met with Fernando Couto, an investor
in the OPIC-backed CDN Port of Nacala concession. Chiquita
believes it will be necessary to construct cold storage
facilities and is interested in financing opportunities,
including OPIC and ExIm. End Note.) Matanuska currently
has a land concession for 6,000 hectares. Banana planting
will commence with 3,000 hectares after the next rainy
season (February/March 2008) with first production and
shipping expected in early 2009. With 3,000 hectares in
production Chiquita anticipates sending one vessel per week
to load bananas at the port of Nacala.

Beyond Bananas
--------------

MAPUTO 00001208 002.2 OF 002




6. (SBU) Chiquita would also like to get involved in
additional projects in Mozambique and has begun preliminary
discussions with TechnoServe to explore ideas and
implementation strategies. The General Manager believes
these projects projects will include support for small
growers, although in the banana industry that means at
least 50 hectares or more, with a focus on specialty
bananas and plantains. Chiquita is also interested in a
variety of other exotic, tropical fruit production for the
specialty markets. The primary market for these products
remains the EU because of logistical limitations and
product shelf life. Chiquita has also stressed to
Matanuska the importance of training and health programs
and expects to partner with Matanuska, local NGOs and
possibly USAID on various projects in these areas.


7. (SBU) Comment: Chiquita is making a big bet on Africa
in hopes to satisfy growing demands in the EU and Middle
Eastern markets. If Chiquita and its partners are able to
produce tropical fruits that meet international standards,
it will significantly boost commercial farming operations
in Mozambique. We understand that Dole Foods is already
making inquiries as only 12 percent of Mozambique's arable
land is presently under cultivation. Chiquita's innovative
approach to investment in Africa, with limited capital risk
and a focus on technical assistance and marketing, may
provide a roadmap for other American companies interested
in opportunities in the agriculture sector. End Comment.

Chapman