Huge eucalyptus plantations have not proved a boon to either foreign investors or local residents, but the Portuguese company

P2020003 Arbre 15 (vent) -Cergy

P2020003 Arbre 15 (vent) -Cergy

Image by Jean-Christophe LENGLET

, announced Monday that it would resume planting, subject to the government making substantial "logistical" investments. (Zitamar 10 July, AIM En 11 July) 

However the other large company, Green Resources of Norway, continues "restructuring" (@Verdade, 5 June) and is doing no new planting. It's most recent financial statement admits "Green Resources is operating under significant cash constraints. This leads to material uncertainty regarding the Group’s ability to continue as a going concern."

Portucel has one of the largest land concessions in Mozambique, 356,000 hectares (3560 square kilometres, equivalent to a block 60 km on each side) of Manica and Zambezia, while Green Resources has 300,000 ha (3000 sq km) in Niassa and Nampula.

Portucel is a major European producer of pulp and paper, notably brown paper bags. It announced on 9 February 2017 that it would "permanently … scale down" its operation in Mozambique. But on Monday 9 July it announced it had signed a memorandum of understanding with the Ministry of Land, Environment, and Rural Development to invest $140 mn in planting 40,000 ha of eucalyptus trees and building a pulp mill. The statement said that the investment would got ahead only if government "addresses a series of conditions precedent to the investment, including the construction of the logistical infrastructure needed to export wood chips." It estimates it will take six months to gain the government commitments.http://en.thenavigatorcompany.com/var/ezdemo_site/storage/original/application/cf7758efa806954174d199432d782ea3.pdf

Navigator originally promised to invest $2.3 bn, but it has only invested $120 mn so far and planted 13,200 ha under its scaled down programme. The World Bank's International Finance Corporation owns 20% of Portucel Mocambique and Navigator owns 80%. 

The struggle between the Portuguese paper company Portucel and local peasants continues after more than five years. Controversially, Portucel was given good farmland in Manica to plant trees to make pulp for brown paper bags for Europe, and families said they were being pushed off their land by Portucel. (O Pais, 6 Dec 2017) A study last year showed the Portucel plantation in Zambezia was benefitting few local people. Peasants gave up land on the promise of jobs, but in practice there are few jobs; only 9% of families that gave up land gained permanent jobs and 75% of local people say their lives were no better.

Green Resources is facing similar problems, with 700 families in Ligonha, Ribaue, Nampula saying they were pushed off their land without promised compensation. There is also an issue of farmers on adjoining land, who claim the eucalyptus drinks so much water that it has dried out their farms. A sign of the bad relations with the community is that the Green Resources most recent (2016/17) financial report notes that 2000 ha of their forests were lost to fire, and there have been significant thefts. They do not say so, but almost surely fires were set by disenchanted neighbours. The company is also in trouble with former donors, saying in its report "The group did not receive government grants in financial year 16/17. Regarding certain grants received in prior years, the use of funds is disputed by the grantors."

(For more details, see this newsletter 360 14Feb2017, 377 17July2017, and 394 10Dec2017; Natacha Bruna, Rural Observatory report:http://omrmz.org/omrweb/wp-content/uploads/Observador-Rural-53.pdf and Green Resources http://dev.greenresources.no/Portals/0/pdf/Green Resources Annual Accounts FYE 2017 Audited.pdf)

COMMENTIn our book Galinhas e Cerveja, we pointed out that no new plantation project in Mozambique has succeeded since independence 43 years ago. With the exception of the old colonial sugar plantations, large plantation-scale farming does not work. Green Resources and Portucel seem to be proving the rule, yet again; a reminder that big foreign investors are often wrong. jh

MOZAMBIQUE 418

News reports & clippings
11 July 2018
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Editor: Joseph Hanlon ( j.hanlon@open.ac.uk)
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