January 11, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Criterion Africa Partners (CAP) announced the completion of an undisclosed investment in Mozambique Fibra Ltd (MozFibra), a subsidiary of Mozambique Tree Farming Pty Ltd (MTF).

Active since 2010, CAP is an independently owned private equity firm investing across the forestry value chain in sub-Saharan Africa through two funds with total AUM of US$275 million.

The firm makes typical investments of between $5 million to $30 million in three focused areas: the rehabilitation of existing plantations; investments in downstream manufacturing; and in wood-based energy generating operations. 

Founded more than 10 years ago, MTF was established by a group of South African entrepreneurs that spent decades as members of NTC Forest Agricultural Co-operative Ltd, a successful cooperative that domestically supplies timber to South African paper company SAPPI and Mozambique-based paper company Mondi, and for export to global woodchip customers for pulp and paper production. 

The founders wanted to replicate this South African tree farming business model in Mozambique through the development of eucalyptus plantations and the development of a wood chip export facility at the country’s Beira port. 

Africa is home to 17 percent of the world’s total forests (636,639,000 hectares) and 20 percent of its tropical forests. However, as the continent experiences unprecedented population growth and growing demand for wood products as economies mature and strengthen, these critical ecosystems are under increasing pressure from deforestation and the loss of biodiversity.

Approximately 60 million people are directly dependent on the continent’s forests, and about 60 percent of the continent’s total population is indirectly dependent on them. However, from 2015-2020, Africa lost 4.4 million hectares of forest per year. This deforestation intensifies the effects of climate change and signifies the critical need for conservation and the protection of biodiversity.

Mozambique itself is rare, as it’s a densely forested sub-Saharan country with natural forests covering 40.6 million hectares, or 51 percent of its land mass. However, the country has been facing serious headwinds and deforestation due to illegal logging, charcoal production, urban sprawl, out-dated, small-scale agricultural production practices, and exploitation, according to the World Bank. Making the development of a responsible and sustainable forestry industry in the country that is guided by policy and governance initiatives an important goal. 

CAP’s investment in MozFibra will be used to strengthen the company’s existing infrastructure, boost its operational capacity, and optimize its efficiency. Additionally, this initial investment is expected to be followed by further capital commitments for the construction of a wood chip mill and for planting as many as 20,000 additional hectares in Sofala and Manica provinces. 

This expansion will lift the company’s wood production capabilities, and enable it to meet the growing demand for timber products while contributing to the development of a sustainable and thriving forestry industry in the Beira Corridor in Mozambique. 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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