The Zambia Development Agency has invited the private sector to establish a modern mango processing project that falls under agro-processing subsector.
ZDA says the mango processing plant once established in the country will produce an average of 30,000 tonnes of mango pulp and 5,000 tonnes of dried mango per annum.
ZDA says the collection depots, with cold storage facilities will be constructed in all Provinces of Zambia and $5 million is required to operationalize the project.
The Agency says private investors will be expected to meet the entire project costs and the venture is expected to be operational in 12 months.
According to an Investment Project Proposal document, the Private Investors will be expected to meet the entire project costs of US$5 million.
“GRZ, Zambia Development Agency (ZDA), Ministry of Trade Commerce and Industry (MCTI) and other Government Agencies will assist the Private Investors to establish the project, through various forms of interventions. The project will be implemented through an Investments Company that will be wholly owned by Private Investors. The project will take 12 months to operationalize,” the document reads.
“The project will produce mango pulp and juice and dried mango chips using fresh mango fruits. The processed products will be of high quality and flavour that meets international standards. The mango pulp and juices will be packaged in appropriate packaging depending on their respective forms.”
“In the case of aseptic product, the pulp will be sterilized and packaged in aseptic bags. The refined pulp will also be packed in cans, hermetically sealed and restored. Frozen pulp will be pasteurized and deep frozen in plate freezers. ZMPP will use branded transparent plastic bags for packaging of dried mango snacks.”
The document says the funds will be utilised to meet the purchase of land, the construction costs of the processing plant buildings, acquisition of processing plant, equipment, machinery, vehicles and working capital to pay for raw materials, inputs, salaries and other operational costs.
“The investment is in the form of equity finance in an Investments Company that will manage and run the project. The project will start generating profits from the first year of operation, with net profit margins ranging from 10% in year one to 23% in year five.”
“The project offers an attractive investment opportunity with an estimated Internal Rate of Return (IRR) of 35%, a Pay Back Period of 4 years, a Discounted Cash Flow (DCF) valuation of US$28.5 million (using a discount rate of 12%) and a Net Present Value (NPV) of US$5.9 million.”
It says the project has positive social externalities through reducing poverty by indirectly empowering a large population of people mostly in rural areas who are involved in the farming and supply of mango fruits.
“In urban areas, employment will be created for those involved in the distribution of processed mango products. Furthermore, the project will have a positive social impact through minimisation of post-harvest loses for mango farmers thereby increasing levels of their disposable income and general welfare and standards of living. In addition the project to contribute to a rise in the Gross Domestic Product (GDP) and inflows of foreign currency through exports of processed mango products.”