The growth of Mozambique’s economy and a rising number of clients are set to prompt logistics company Agility to double the area of the warehouse it has in Maputo since 2021, said the company’s CEO, Geoffrey White.
Estimating that by the end of the year there will be a 100% occupancy rate in the 32,000 square metres built at the facility in the first phase in 2020, the company has resolved to double the built area.
“We’ve just decided that we’re going to double the facilities to meet demand,” White told Lusa news agency in London, where he was taking part in the FT Africa Summit 2024 conference. “We hope that Mozambique’s economy will continue to grow.”
According to White, “the situation slowed down after the Covid-19 pandemic, but in the meantime it has gained momentum.”
What is driving demand is the expectation that the liquefied gas project in the north will start up in 2025 – with some clients having signed contracts in the expectation that this will happen – and the preference of more South Africa-based companies for the Port of Maputo rather than the Port of Durban because they consider it a better gateway into and out of the region.
Agility has bought 360,000 square metres of land, which will allow it to build up to 180,000 square metres of warehouses. It has so far invested $30 million (€27.6 million) in Mozambique with its own funds.
The facility’s location, next to Maputo’s new ring road, gives it good access to northern Mozambique, which accounts for 60% of the market, to the country’s capital, which accounts for almost 40%, to South Africa and to the seaport.
“From a logistical point of view, it works very well,” he said.
According to White, around 70% of tenants use the facilities for storage and distribution, but 30% have machinery and use the space for manufacturing, packaging and processing for export or import.
Around 60% of Agility’s clients in Mozambique are multinationals and the rest are local companies that “prefer to spend their capital on business development rather than building real estate.
“We have good examples in Mozambique and other countries where companies have started with one unit and then, as the business grows, they can simply move to another unit in the same location and we make growth much easier,” he noted.
If growth in Mozambique is justified, the Agility’s CEO said, it might add satellite facilities in the cities of Nampula, Beira or Pemba, to increase distribution capacity in the country.
Agility is listed on the stock exchange in Abu Dhabi, in the United Arab Emirates, with a market capitalisation of $5 billion (€4.6 billion) and one of its main activities is running warehouses in the Middle East and Africa.
The company arrived in Africa in 2019, starting in Ghana and gradually expanding to Ivory Coast, Nigeria, Mozambique and Egypt.
“The concept is very simple: we buy a large plot of land with good road access and this allows us to start a warehouse park and build it in phases,” explained White.
One of the biggest constraints for international companies in entering the African market, he explained, is securing the land title to have facilities, as well as the time and cost of construction.
“Our business model consists of eliminating these risks for international companies,” which can move into a unit in the building a month after signing the contract “instead of spending years setting up in the market,” he said, explaining that this “quick solution reduces the capital needed to enter Africa and allows you to arrive in a very familiar environment, which is safe, with the power always on and start doing business.”
After buying the land and ensuring that it has the title deed, Agility moves ahead with construction in accordance with international sustainability standards.
Currently, the strongest market on the African continent is probably Ivory Coast, where the company has already expanded its built area four times, followed by Ghana and Mozambique.
Angola is also in its plans for growth, as are Tanzania, Ethiopia and Morocco.
Some clients have accompanied Agility in various African countries, White said.
“We have international clients who tell us they want to expand throughout Africa, but they don’t want to have different landlords, preferring to pay for a product they know for its quality and services and with the same rental contract model in each country,” he emphasised.
Lusa
