|AN OVERVIEW OF ADMARC
The Agricultural Development and Marketing Corporation (ADMARC) was established by an Act of Parliament in 1971 with the objective of carrying out trade in small holder agricultural produce, supplying farm inputs to small holder farmers and exports of various agricultural produce for foreign exchange.
The Act also empowered ADMARC to invest in viable activities such as agro-processing with a view of adding value to Malawiís agricultural produce.
In this line, the Corporation operates two Ginneries which are basically for processing of seed cotton, groundnut factory for grading of groundnuts into exportable grades and rice mills for rice processing.
Tobacco, which is the largest foreign exchange earner for the country, remains the main crop for ADMARC in terms of capital outlay and the realized revenue. The crop is basically grown by small holder farmers and is sold through the Auction Floors which are strategically positioned in the three regions. Other crops of great importance are Cotton, groundnuts, Pulses and Chillies.
Following the liberalization of agricultural commodity marketing late 1980ís the Corporation controls almost 60% of agricultural commodity marketing down from the monopoly era where she used to handle 90% of marketed volumes. However, in order to boost her share and compete effectively with other intermediate buyers, the Corporation moved away from the pan-territorial/pan-seasonal pricing, to localised pricing where prices are area specific as determined by demand and supply and through provision of credit facilities to farmers for some strategic commodities the Corporation is able to increase her share and increase production of other commodities.
The sourcing of these agricultural commodities is normally from own funds, local banks and offshore borrowing. For example the current season the Corporation is expected to spend well over MK2b for purchases.
As a nation-wide agricultural marketing organisation, administratively, the Corporation is managed by an Executive Management team, composed of the General Manager as Chief Executive, Mr. Friday Jumbe, a Deputy General Manager, Mr. E.Y Sawerengera and two Assistant General Managers for Finance and Marketing Peter Mulamba, Albert Kuthemba-Mwale respectively.
The Corporation employs about 8000 permanent members of staff and during peak period when crops are being sourced, the number goes up to almost 15,000 including seasonal staff. These people work in 100 markets/depots and about 1000 seasonal markets, which are scattered all over the three regions of the country.
|ADMARC INVESTMENT HOLDING COMPANY LIMITED (AIHC)
AIHC is a 100% owned subsidiary and investment arm of Admarc. Established in 1991, its core objective is to manage the investment made by Admarc in various sectors of the economy, which facilitate the development of agriculture and the agricultural based economy.
|THE INVESTMENT PORTFOLIO
Having fully privatised three companies, the current investment portfolio of AIHC comprises 6 subsidiary companies and 9 associated companies. AIHC's interest in it's associated companies, range from 22.5% to 50%. Most of the associated companies are partly privatised, while all companies in the investment portfolio are earmarked for privatisation.
The current investment portfolio is in the following sectors of the economy.
|FINANCE AND BANKING
The National Bank of Malawi - 39.16%.
National Bank is the largest commercial bank in the economy and champion provider of finance for farm inputs. Reaching the remotest areas in the country with it's agency establishments country wide. AIHC has offered 7% of the bank's equity to the public, a transaction which will result in AIHC reducing it's stake in the bank to 32.16% and the bank listing on the Malawi Stock Exchange by August 2000.
|The Investment & Development Bank (Indebank) - 27.56%.
Indebank specialises in provision of long term development funds. Also provides short term seasonal funding for farm inputs.
The Finance Corporation of Malawi Ltd (Fincom) - 25%.
Fincom is a fairly new bank having registered as a financial institution in 1989. Up to 30th June 1999, Fincom was 100% owned by AIHC at which date NEDCOR of the Republic of South Africa bought 75% equity of the bank. In the first few years of its operation, to a large extent, Fincom, specialised in financing of imports and exports. Currently the bank has expanded in terms of both product and client base and is planning to go into retail banking.
|PROCUREMENT, TRANSPORT & FREIGHT
Malawi Finance Company Ltd (MFC) - 100%
A procurement agent company with established offices in Johannesburg and London and affiliated to the Charles Kendall Group, a worldwide procurement agent. Facilitating external procurement of machinery and parts, farm inputs & implements and manufacturing inputs.
MITCO LTD - 100% owned
A transport broking company. Linking up Malawi's small-scale transporters and big companies in transportation of bulk agricultural inputs and produce within the country and the Southern Africa Region.
Shire Bus Lines - 71%
Shire Bus Lines operates a countrywide passenger service, reaching the most remote areas of the country. Shire Bus Lines is the main provider of transportation for small holder farmers.
Manica - 50%
A freight forwarding company. The main agent in the country's importation and exportation.
Sugar Corporation of Malawi (Sucoma) - 25.05%
Cane Sugar manufacturer currently controlled by the Illovo Sugar group of companies. AIHC originally held 37% of the company. The difference represents what AIHC has so far sold to local and international investors.
David Whitehead & Sons Malawi Ltd - 49%
This is the only textile manufacturing company in the country. The main raw material for the manufacturing being cotton, which is locally produced by small holder farmers. Fabrics manufactured are sold locally as well as exported to other countries in the Southern Africa region.
|VALUE ADDED & FOOD PROCESSING
Grain & Milling Company Ltd (Gramil) - 100%
Gramil is a maize and wheat milling company, supplying maize and wheat flour countrywide. It has the largest flour mills in the country.
Cold Storage Company Ltd - 100%
The main abattoir for the country. Supplying meat and its products to the two main cities of Blantyre and Lilongwe.
Malawi Tea Factory Company Ltd (Mateco) - 40%
Tea processing company. The company buys Green leaf from the 15,000 small holder tea growers in the country. Negotiations for privatisation of the company are in very advanced stages.
National Seed Cotton & Milling Company Ltd (NSCM) - 22.5%
NSCM is an agricultural research based company, currently controlled by the Cargill Group. Supplying seed to small holder and estate farmers throughout the country. Also carries out value added processing for a selected number of agricultural products.