‘It’s a plan to divide Africa ’
By Thom Khanje
Lilongwe, Malawi Oct. 16, 2009 -- President Bingu wa Mutharika has torn apart the Economic Partnership Agreements (EPAs) which the European Union wants to enter into with developing countries, describing them as a European conspiracy aimed at disintegrating Africa .
Addressing a press conference in Lilongwe on Wednesday, Mutharika said the EPAs were a “divide and rule” tactic for Europe and declared that Malawi will not sign the EPAs until all concerns are addressed.
“I know this because am one of the people who started the concept of regional integration in Africa,” said Mutharika, a former secretary general of the Common Market for Eastern and Southern Africa (Comesa) and top trade technocrat in the United Nations.
He called on other African countries not to sign the agreements as well.
The EPA is a reciprocal trade agreement under which developing countries are expected to trade on an equal footing with Europe as required by the World Trade Organisation – WTO unlike presently when only the developing countries send their goods into Europe under duty free.
“ Malawi will not sign, even if it means the country being the only one without signing. I have asked them to tell me even one benefit which Malawi will get from the agreement, and they haven’t,” said Mutharika.
He said the EPA was a plan by some “sinister” people in Europe to kill regional integration in Africa, wondering why the EU had created its own groups in Africa for EPA negotiations instead of going through existing groupings such Southern Africa Development Community (Sadc), Comesa and Economic Community for West African States (Ecowas).
“The EPAs should have been modelled along the existing regional blocks. But they are cutting across Africa , dividing the continent systematically. This is hypocrisy,” said Mutharika.
He warned other African countries to be cautious when signing the EPAs, saying if they are not careful, they will wake up one day and discover that regional groupings which they have worked hard to establish had become irrelevant.
He said all along, the EU has been trading with developing countries under the African, Carribean and Pacific (ACP) arrangement which he said they are now trying to do away with because they could not push it around.
“The ACP became too strong for them, so they have created the EPA to weaken us. Malawi will not be party to this as long as am president. May be the country will sign that after I have left,” said Mutharika.
Malawi is one of the few countries in Africa that still remains undecided on whether to sign.
While most of the 16 countries grouped with Malawi in the Eastern and Southern Africa – ESA have at least entered into interim arrangements with the European Commission on EPAs pending full ratification, Malawi has not moved a step towards signing the agreement.
Malawi wants the EU to commit itself on helping the country improve its infrastructure and industrial capacity before it can sign the EPAs.
“We have got a lot of bottlenecks which makes it impossible for us to compete with Europe in trade. We have to address our supply-side constraints first and we need their [EU] assistance to do that,” said former Minister of Trade Henry Mussa told Daily Times earlier this year.
But the European Commission has disputed fears that the EPA would kill local industries in Africa, saying on the country the country stand to benefit cheap industrial machinery and raw materials which they can import duty free from Europe under the EPA.
"Consumers stand to benefit more from lower prices of goods from Europe,” former EU Commissioner for Trade Peter Mendelson told the Malawi press last year.
Some international trade experts have advised Malawi not to sign the EPA since, as a Least Developed Country – LDC; the country has a right of opting out from the EPA in the meantime.
As an LDC, Malawi already benefits from almost universal tariff and quota free access to the EU market under the Everything But Arms – EBA arrangement, hence – compared to non-LDCs, the benefits of the country signing the EPA are more limited for Malawi .
Under the ESA negotiating group where Malawi belongs to, only Mauritius is on the verge of signing a full EPA with the EU. Other countries such as Comoros , Madagascar , Seychelles , Zambia and Zimbabwe signed interim agreements way back in 2007 but are yet to conclude their negotiations towards a full EPA.
Malawi alongside Djibouti , Sudan , Ethiopian and Eritrea are yet to take initial steps towards signing EPAs.The private sector in the country wants government to go ahead and sign and initial EPA agreement while continuing discussions on a full EPA with the EU but the civil society says government should not move a step forward until all the concerns have been addressed.
Friday, October 16, 2009
Monday, August 17, 2009
Tobacco plant opens in Lilongwe
by Thom Khanje
Lilongwe, Malawi August 17, 2009 -- A new US$24 million tobacco processing factory has opened at Kanengo Heavy Industrial Site in Lilongwe under the joint venture between the Tobacco Association of Malawi (Tama) and tobacco merchants Premium Tama Tobacco Limited, creating 1,200 jobs.
The vast factory shells, spread on a 6.7 hectare piece of land with 34,000 square meters of factory space, have housed machinery with a capacity to process 40 million kilogrammes of tobacco a year, making it the third largest tobacco plant of its kind in Malawi after those of Limbe Leaf and Alliance One.
Operating under the trading name Kanengo Tobacco Processors Limited, the factory will in addition to processing tobacco from Premium Tama, also open its plant to any other tobacco merchant without own machinery to mill their leaf for export to international markets.
“We want to open a new business opportunity for Malawians to be able to create their own buying companies at the auction floors and bring their leaf to us for processing and packaging. All they have to do is to find markets and buy tobacco at the auction floors, we will do the rest for them,” said Thom Malata, Chief Executive for Premium Tama, the main shareholder in the venture.
He said the company is ready to double its processing capacity even by next year to 80 million kilogrammes of tobacco per year should there be enough demand for third party processing at its plants.
“We have the space and the means to increase the capacity,” said Malata, assuring the merchants that rates charged to them will not be different to those Premium Tama will be paying to process its leaf at the factory.
The establishment of Kanengo Tobacco Processing Factory has increased Malawi ’s tobacco processing capacity to 260 million kilogrammes up from 220 million kg previously, creating enough ability for the country to process on time all the 224 million kiligrammes of tobacco projected to have been grown in the country this year.
Under the venture, Premium Tama was expected to invest US$16 million as part of its 75 percent shareholding in the factory while Tama has been allocated a 24 percent stake worth US$8 million.
However, Premium Tama has financed the full project costs, with an agreement that Tama would refund its partner once it raises its financing in the project.
Tama’s Director of Finance and Administration Lemson Chitawo said the association was already in the process of raising the capital from its membership through a special company called Tama Processors Limited where tobacco growers can by shares at a minimum subscription of K10, 000, with each share valued at K2 .
He said the association has partnered with the NBS Bank where Tama members can buy the shares in the company. He said the association expects to raise the capital by the end of the tobacco trading season in March next year since most of them were still selling their leaf at the floors.
“We want to give our members a chance to also have a stake in tobacco processing because that is where a lot of tobacco money is earned,” said Chitawo, adding, “That is why companies like Limbe Leaf even have aeroplanes for their executives, because they make a lot of money there. We want growers too to start enjoying from tobacco money.”
Chitawo said Premium Tama was even ready to increase Tama’s stake in Kanengo Tobacco Processing Limited to 50 percent, should there be demand from the association’s members for more shares.
He said should its members fail to fully subscribe to the equity, Tama will find ways of raising it elsewhere for warehousing so that they could be offered to its grower members in future.
Lilongwe, Malawi August 17, 2009 -- A new US$24 million tobacco processing factory has opened at Kanengo Heavy Industrial Site in Lilongwe under the joint venture between the Tobacco Association of Malawi (Tama) and tobacco merchants Premium Tama Tobacco Limited, creating 1,200 jobs.
The vast factory shells, spread on a 6.7 hectare piece of land with 34,000 square meters of factory space, have housed machinery with a capacity to process 40 million kilogrammes of tobacco a year, making it the third largest tobacco plant of its kind in Malawi after those of Limbe Leaf and Alliance One.
Operating under the trading name Kanengo Tobacco Processors Limited, the factory will in addition to processing tobacco from Premium Tama, also open its plant to any other tobacco merchant without own machinery to mill their leaf for export to international markets.
“We want to open a new business opportunity for Malawians to be able to create their own buying companies at the auction floors and bring their leaf to us for processing and packaging. All they have to do is to find markets and buy tobacco at the auction floors, we will do the rest for them,” said Thom Malata, Chief Executive for Premium Tama, the main shareholder in the venture.
He said the company is ready to double its processing capacity even by next year to 80 million kilogrammes of tobacco per year should there be enough demand for third party processing at its plants.
“We have the space and the means to increase the capacity,” said Malata, assuring the merchants that rates charged to them will not be different to those Premium Tama will be paying to process its leaf at the factory.
The establishment of Kanengo Tobacco Processing Factory has increased Malawi ’s tobacco processing capacity to 260 million kilogrammes up from 220 million kg previously, creating enough ability for the country to process on time all the 224 million kiligrammes of tobacco projected to have been grown in the country this year.
Under the venture, Premium Tama was expected to invest US$16 million as part of its 75 percent shareholding in the factory while Tama has been allocated a 24 percent stake worth US$8 million.
However, Premium Tama has financed the full project costs, with an agreement that Tama would refund its partner once it raises its financing in the project.
Tama’s Director of Finance and Administration Lemson Chitawo said the association was already in the process of raising the capital from its membership through a special company called Tama Processors Limited where tobacco growers can by shares at a minimum subscription of K10, 000, with each share valued at K2 .
He said the association has partnered with the NBS Bank where Tama members can buy the shares in the company. He said the association expects to raise the capital by the end of the tobacco trading season in March next year since most of them were still selling their leaf at the floors.
“We want to give our members a chance to also have a stake in tobacco processing because that is where a lot of tobacco money is earned,” said Chitawo, adding, “That is why companies like Limbe Leaf even have aeroplanes for their executives, because they make a lot of money there. We want growers too to start enjoying from tobacco money.”
Chitawo said Premium Tama was even ready to increase Tama’s stake in Kanengo Tobacco Processing Limited to 50 percent, should there be demand from the association’s members for more shares.
He said should its members fail to fully subscribe to the equity, Tama will find ways of raising it elsewhere for warehousing so that they could be offered to its grower members in future.
Malawi upbeat on sugar exports
By Thom Khanje
Lilongwe, Malawi August 17, 2009 -- Illovo Sugar Malawi Limited says although Malawi does not export its sugar into the open overseas markets, the company would enjoy from the current souring of sugar prices on the international markets through its exports to Zimbabwe , Burundi and Rwanda .
Illovo Sugar Malawi spokesperson Ireen Phalula said in an interview on Wednesday the company’s sugar exports to Europe are based on fixed prices but was optimistic that the country would reap from regional exports under Comesa which are based on market prices driven by supply and demand.
“We may not be on the larger world market but we hope to get some benefits from our exports to Burundi , Rwanda and Zimbabwe ,” said Phalula.
International sugar prices have this week soured to their highest rate since 1981 following an increase in demand as a result of demand for the product in Brazil and expected fall in production in India .
The BBC reported on Tuesday that raw sugar futures have 3 percent, with the average price hovering above 22 US cents per pound this week, the highest for 28 years.
"The main problem is a deficit in sugar supplies," BBC quotes Nick Penney, a trader with Sucden Financial, a firm that focuses on sugar trading.
Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained.
Sugar production in India for 2008-09 fell 45% year-on-year, according to a report by Sucden and quoted by the BBC.
And a "drastic fall" is expected for the coming Indian crop, it said.
India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops.
There are concerns that the pending sugar crop, which will be ready around November, will be inadequate.
"This [sugar market] train is running express," said Alex Oliveira, senior sugar analyst for Newedge USA in New York .
"It's feeding on itself."
Malawi exports an average of 50,000 tons of sugar to Europe and another 50,000 tons to the regional markets out of a total of 300,000 of sugar it produces in the country annually.Illovo produces 300,000 tons of sugar every year of which 200,000 tons is sold to local industrial and consumer markets while the rest is for export to EU , USA , Southern and Eastern parts of Africa and other world markets.Malawi is expected to start quota free preferential sugar exports to Europe under the Everything But Arms – EBA deal with the European Union in October this year.
Illovo Sugar, the country’s sole sugar producer, trades with Europe companies under a quota system under three schemes namely: ACP/EU Sugar Protocol, Complementary Quota and later under the Everything-But-Arms (EBA).
Although the country has an option of remaining under the EBA for its future trade with Europe, the Malawi government is currently negotiating for a new Economic Partnership Agreement – EPA with the Europe which, if accepted by Malawi, could also open up to the country to goods made in Europe on duty free entry.
Lilongwe, Malawi August 17, 2009 -- Illovo Sugar Malawi Limited says although Malawi does not export its sugar into the open overseas markets, the company would enjoy from the current souring of sugar prices on the international markets through its exports to Zimbabwe , Burundi and Rwanda .
Illovo Sugar Malawi spokesperson Ireen Phalula said in an interview on Wednesday the company’s sugar exports to Europe are based on fixed prices but was optimistic that the country would reap from regional exports under Comesa which are based on market prices driven by supply and demand.
“We may not be on the larger world market but we hope to get some benefits from our exports to Burundi , Rwanda and Zimbabwe ,” said Phalula.
International sugar prices have this week soured to their highest rate since 1981 following an increase in demand as a result of demand for the product in Brazil and expected fall in production in India .
The BBC reported on Tuesday that raw sugar futures have 3 percent, with the average price hovering above 22 US cents per pound this week, the highest for 28 years.
"The main problem is a deficit in sugar supplies," BBC quotes Nick Penney, a trader with Sucden Financial, a firm that focuses on sugar trading.
Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained.
Sugar production in India for 2008-09 fell 45% year-on-year, according to a report by Sucden and quoted by the BBC.
And a "drastic fall" is expected for the coming Indian crop, it said.
India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops.
There are concerns that the pending sugar crop, which will be ready around November, will be inadequate.
"This [sugar market] train is running express," said Alex Oliveira, senior sugar analyst for Newedge USA in New York .
"It's feeding on itself."
Malawi exports an average of 50,000 tons of sugar to Europe and another 50,000 tons to the regional markets out of a total of 300,000 of sugar it produces in the country annually.Illovo produces 300,000 tons of sugar every year of which 200,000 tons is sold to local industrial and consumer markets while the rest is for export to EU , USA , Southern and Eastern parts of Africa and other world markets.Malawi is expected to start quota free preferential sugar exports to Europe under the Everything But Arms – EBA deal with the European Union in October this year.
Illovo Sugar, the country’s sole sugar producer, trades with Europe companies under a quota system under three schemes namely: ACP/EU Sugar Protocol, Complementary Quota and later under the Everything-But-Arms (EBA).
Although the country has an option of remaining under the EBA for its future trade with Europe, the Malawi government is currently negotiating for a new Economic Partnership Agreement – EPA with the Europe which, if accepted by Malawi, could also open up to the country to goods made in Europe on duty free entry.
Wednesday, August 12, 2009
Malawi set for Uranium exports
By Thom Khanje
Daily Times Newspaper, Malawi
Lilongwe, August 5, 2009 -- Uranium exports from Kayelekera Uranium Mine in Karonga, Malawi's northern region district bordering Tanzania, are expected to start next month following months of trial processing and production at the mine since the official commissioning of the mine by President Bingu wa Mutharika on April 17 this year.
In a company report filed with the Australian Stock Exchange last week, Paladin Energy Limited managing director John Borshoff told investors that Kayelekera Mine was in its final development stages and that trial production started at the mine in June.
“By June, projected production was reached at the mine and desired performance was reached and was on schedule,” said Borshoff, adding, “Commercial production at the mine will start early September and first production is planned for shipping out towards the end of the same month.”
Borshoff said the company had so far invested US$167 million at the mine in Karonga and that when fully developed; the mine will produce 3.3 million pounds of uranium for the export market.
According to Borshoff, 34,600 pounds of tradable yellow-cake uranium by-product had been produced from the mine by June this which if export could earn Malawi up to US$1.7 million based on the current international market price of US$52 per pound for the product as recorded of late on the world markets.
The figure is likely to increase by the time exports start in September. The development is likely to ignite excitement and boost the country’s foreign exchange earnings which have for months been in deficits, thereby crippling some of the country’s production lines.
With tobacco exports failing to provide adequate foreign currency for the economy, both government and industry have been banking on the start of uranium exports from Karonga as one of the main short to medium term solution to the country’s foreign exchange generation shortfalls.
According to Borshoff, plant construction at the mine has been “substantially” completed and that focus was now on pit development where the ore body has now been fully exposed across the width of the pit, ready for extraction and commercial processing.
He said the 203 workforce at mine was currently working on daily single shift but was expected to go double shift operation by July.
Borshoff said although the processing plant installed at Kayerekera was the first of its kind built outside Russia and therefore, in need of more trials and refinement, the company had not experienced major problems with its operation so far.
“The crushing and milling circuits are generally operating problem free, with the design grind being easily and consistently achieved,” said Borshoff in the report dated July 31, 2009.
On international uranium prices, which for the past months have been on the downfall due to the global financial crisis, Borshoff reports that spot prices have start recovering with prospects looking highly positive because of an increase in demand.
“”The Ux spot price recovered from a recent low price of US$40 per pound in April to US$52 by the end of June,” reported Borshoff, adding that long term indicator price for the commodity is at US$65 per pound, with uranium demand expected to increase.
“The demand will increase as new nuclear power plants are commissioned world-wide while simultaneously the contribution of secondary supply sources diminishes significantly over the next five years,” said Borshoff.
Daily Times Newspaper, Malawi
Lilongwe, August 5, 2009 -- Uranium exports from Kayelekera Uranium Mine in Karonga, Malawi's northern region district bordering Tanzania, are expected to start next month following months of trial processing and production at the mine since the official commissioning of the mine by President Bingu wa Mutharika on April 17 this year.
In a company report filed with the Australian Stock Exchange last week, Paladin Energy Limited managing director John Borshoff told investors that Kayelekera Mine was in its final development stages and that trial production started at the mine in June.
“By June, projected production was reached at the mine and desired performance was reached and was on schedule,” said Borshoff, adding, “Commercial production at the mine will start early September and first production is planned for shipping out towards the end of the same month.”
Borshoff said the company had so far invested US$167 million at the mine in Karonga and that when fully developed; the mine will produce 3.3 million pounds of uranium for the export market.
According to Borshoff, 34,600 pounds of tradable yellow-cake uranium by-product had been produced from the mine by June this which if export could earn Malawi up to US$1.7 million based on the current international market price of US$52 per pound for the product as recorded of late on the world markets.
The figure is likely to increase by the time exports start in September. The development is likely to ignite excitement and boost the country’s foreign exchange earnings which have for months been in deficits, thereby crippling some of the country’s production lines.
With tobacco exports failing to provide adequate foreign currency for the economy, both government and industry have been banking on the start of uranium exports from Karonga as one of the main short to medium term solution to the country’s foreign exchange generation shortfalls.
According to Borshoff, plant construction at the mine has been “substantially” completed and that focus was now on pit development where the ore body has now been fully exposed across the width of the pit, ready for extraction and commercial processing.
He said the 203 workforce at mine was currently working on daily single shift but was expected to go double shift operation by July.
Borshoff said although the processing plant installed at Kayerekera was the first of its kind built outside Russia and therefore, in need of more trials and refinement, the company had not experienced major problems with its operation so far.
“The crushing and milling circuits are generally operating problem free, with the design grind being easily and consistently achieved,” said Borshoff in the report dated July 31, 2009.
On international uranium prices, which for the past months have been on the downfall due to the global financial crisis, Borshoff reports that spot prices have start recovering with prospects looking highly positive because of an increase in demand.
“”The Ux spot price recovered from a recent low price of US$40 per pound in April to US$52 by the end of June,” reported Borshoff, adding that long term indicator price for the commodity is at US$65 per pound, with uranium demand expected to increase.
“The demand will increase as new nuclear power plants are commissioned world-wide while simultaneously the contribution of secondary supply sources diminishes significantly over the next five years,” said Borshoff.
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