MTF’s Downstream Strategy Gains Momentum Following Earlier Setbacks

Mozambique Tree Farming (MTF) founding shareholders have long held a vision to develop a chipping plant at the Port of Beira, designed to scale to one million tonnes of throughput annually for export to international pulpwood operators. This scale would be supported by wood-flow from the planned 40,000-hectare plantation development.

As the funding support funding strategy for the Moz Fibra and IFM projects ahead of the installation of the planned chipping facility, Moz Fibra negotiated a log supply agreement with a European pulpwood operator in 2020. Between June 2021 and July 2024, the company exported 285,500 cubic metres of eucalyptus pulpwood logs across nine bulk shipments from the Port of Beira.

A sharp downturn in the international pulp market ultimately led to the loss of this contract. In response, Moz Fibra explored the export of peeler logs to offset the resulting revenue shortfall. Fifty 40-foot containers were dispatched in two shipments to customers in India and China. While this initiative delivered valuable operational and market insights, the realised market values were insufficient to offset the costs associated with containerised shipping and upstream operational costs.

These developments necessitated a reassessment of the original timeline, which had targeted funding and construction of the chipping plant from 2027. Plantation expansion plans were further impacted by delays in anticipated funding during the 2023/24 period.

In response, MTF has implemented a revised downstream strategy focused on diversification at a scale aligned with current sustainable wood-flow. This strategy will see Moz Fibra establish manufacturing capabilities across utility poles, building materials, and biomass supply.

In parallel, IFM has successfully secured supply agreements with local customers for peeler logs and biofuel. These agreements are generating interim funding to support ongoing operations while manufacturing capabilities are developed. Moz Fibra is expected to contribute to the interim funding strategy in due course.