Flame Tree opens tank factory in Mozambique

Listed fast moving consumer goods company Flame Tree Group has expanded its operations into southern Africa with the opening of a water tank plant in Mozambique.

The move is part of Flame Tree’s strategy to build a diversified portfolio of African-manufactured brands for African consumers, covering plastics, cosmetics and food in multiple markets.

The Rino Tanques Lda factory located in Nampula, Mozambique is expected to serve consumers in the northern part of the country, cutting down the delivery of products to the country significantly.

Flame Tree Group Chief Executive Officer Heril Bangera said the new facility will be able to manufacture a wide range of plastic tanks up to 10,000 liters.

“Flame Tree Group Holdings as a whole is very excited with this development. In Mozambique, we have not been able to cater to the northern part and as such we will now be able to strengthen our market position by covering a bigger geographical area of the country,” Mr Bangera said.

Despite Mozambique’s sluggish economic growth, Mr Bangera believes the country provides a unique opportunity to grow its revenues.

“Although Mozambique’s currency has devalued significantly this year, we as a company are looking at long-term growth and believe that our business can accommodate such fluctuations,” he said.

Flame Tree’s six month net profit dropped eight percent to Sh80.5 million shillings on the back of higher production costs.

During the period ended June 30, sales and distribution costs doubled to Sh175 million, perhaps indicating the need to set up a manufacturing plant in Mozambique to lower costs.