In recent years, Nacala Logistics has made major interventions in the modernisation of logistics and port infrastructure, making the Nacala Corridor one of the largest projects in the region. What is the response in terms of competitiveness and what is the contribution to national and regional development?
Nacala Logistics is a partner of the major coal exporter, Vulcan Mozambique. It specialises in coal logistics, general cargo and passenger transport, in addition to port operations. Today, the interests of the logistics companies operating along the corridor – the Northern Development Corridor (NDC), the Nacala Integrated Logistics Corridor (NLC) and the Central East African Railways (CEAR) – are consolidated and represented by Nacala Logistics. In an interview with the UK’s Africa Outlook Magazine, Nacala Logistics CEO Abhay Mishra said that “the Nacala Corridor is already one of the largest logistics infrastructure projects built in Southern Africa”. He was referring to the result of the investments made in recent years.
What is the magnitude of the whole Nacala Logistics venture and what is its weight in terms of competitiveness, visibility and profitability, compared to other important corridors such as Maputo and Beira?
The Nacala Logistics Corridor is an ambitious project that seeks to boost the country’s economic development and competitiveness. The Northern Development Corridor (NDC, railway) is a key part of this development, created to connect Malawi and meet the needs of transit cargo transport (import and export) to that country through the Port of Nacala. Compared to other important logistics corridors, such as the Maputo Corridor and the Beira Corridor, the Nacala Corridor stands out for occupying a strategic position in terms of transit cargo transport, operational efficiency and quality of infrastructure in this region. This strategic position makes it a key element for the economic development of the region and for Mozambique’s competitiveness in the global scenario.
Due to its relevance in the external trade of the country and neighbouring countries, the Nacala Logistics Corridor plays a crucial role for the regional economy. The transport of products such as gypsum, clinker, fertilisers, grains and other commodities through this corridor is fundamental for economic growth. In recent years, significant investments have been made in modernising its infrastructure, specifically the railway and the Port of Nacala, resulting in a more efficient and reliable operation. Investments have also been made in the construction of dry ports along the corridor and works are underway to connect it to Zambia via the Chipata border.
Nacala Logistics will introduce another passenger route, between Nampula and Nacala, after 33 years without service on this route. What is the importance and purpose of this resumption?
It is a major milestone in the history of the company and the country. We are here to give the community of Nacala and the province of Nampula, in general, another route for the transport of people and goods on the Nampula – Muchilipo route, at a reduced cost and with more safety than the other alternatives. Where there is transport, there is development, there are possibilities for the expansion of markets of all kinds to improve the lives of communities. For this service we have invested in improving infrastructure such as railway stations (in Namialo and Muchilipo) which for decades have been inoperable. With the introduction of this train, more people will be able to transport their goods at a lower cost. We are proud to contribute to this goal and strengthen our role as a driver of the local economy.
“The team at Nacala Logistics has broken all previous records for railway and port operations in the first year of running the current company.”
Nacala Logistics is a rail-port company responsible for managing several infrastructures: the Nacala-a-Velha Multipurpose Port Terminal and 1600 kilometres of rail. Do coal logistics and port operations at Nacala-a-Velha carry more weight than the others?
With a railway network of world-class assets, Nacala Logistics delivers inexhaustible value to its users. Serving a diverse list of customers around the world, approximately 70 per cent of the company’s market is based in Asia. Meanwhile, Africa represents the second largest market with 5 per cent. With coal being the main cargo of rail transport on the Nacala Corridor, it is almost natural that it is the company’s largest operation. However, that does not mean it is our only priority. We make every effort in terms of investment, technical and personnel, to make general cargo transport a reference in the region.
You have recently announced major modernisation interventions. What did they consist of, how much did they cost and what impact did they have on the efficiency and profitability of the company?
In the last three years we have made a major investment to increase the capacity of the railway to handle and transport cargo, with improvements on the southern and northern lines. We made a specific investment for general cargo on the south-north section of Malawi and purchased more locomotives. We are talking about thousands of dollars in investments that obviously bring results. Since we took over the management of the company, we have realised significant improvements and overcome major operational and maintenance issues in a short time. I am happy to share that the Nacala Logistics team broke all previous records for railway and port operations in the first year of the current company’s management. To top it off, from 2019 to the end of 2022, we have paid approximately 540 million in taxes, including corporate taxes, concession fees and others.
The conflict between Russia and Ukraine has also led to important changes in international trade. Has this had an impact on the Nacala Corridor?
In the first year it had a significant impact. The consequences were felt directly in the region’s logistics operations. The Nacala Corridor is vital in transporting commodities such as fertilisers and wheat to Southern African countries, and as the conflict affected the availability of these products on the international market, this led to a reduction in the volume of imports through the Corridor. In addition, the lack of imported products, mainly wheat and fertilisers, has caused a significant increase in their prices, which has a negative impact on the competitiveness of the Nacala Corridor in relation to other trade routes available in the region. Countries dependent on this route have been faced with the difficult decision of absorbing the higher transport costs along the Nacala Corridor or exploring import alternatives through other routes, looking for more advantageous prices.
What are the major challenges facing Nacala Corridor operators today and what are the ambitions and commitments for the future?
The priority is to stabilise operations. After the transition of the corporate restructuring and the huge impact of the cyclones that passed through Mozambique and Malawi this year, we had to recover practically from scratch. Looking at it from a commercial point of view, the natural vocation of the Corridor is to reach its full length, i.e. to get the railway operating up to the Zambian border, in the short term. Diversifying into other logistics models is also on the table. Rail is the mode of transport par excellence, but eventually engagement with the road model can optimise some flows and support the growth of the corridor to its full capacity.
