Vita Rice: Singapore firms eye Mauritius potential
June 8, 2011
Straits Times
Li Xueying
First-ever visit by Singapore business delegation to explore opportunities in island nation.
There is a rice farm just north of the airport in Mauritius with Singapore’s name on it.
Opened in 2009 and spread over 500ha, Vita Rice is the island nation’s largest agriculture development outside the production of its traditional mainstay – sugarcane.
Vita Rice’s boss Graeme Robertson is aware of the irony of Singapore company growing rice in Mauritius. He told The Straits Time: “Singapore does not have rice farming skills. But is does have the engineering, administrative, marketing and financial skills without which the farming is unlikely to proceed on a commercial basis”.
His Singapore-based private equity firm, Intrasia Capital, is the project’s major shareholder, along with the Mauritian Government. It has big plans: to provide one-third of Mauritius rice needs by 2014, as well as export to Singapore. Like Singapore, the nation of 1.3 million people imports all its rice – some 75,000 tonnes a year.
There is also a chance of Crocodile polo shirts making a splash in this sunny isle. The Singapore clothing label is in town to sass out the market for its apparel. Said assistant General Manager Lim Keng Boon: “Though the population is small, it has attractive incentives for investors and it seems Mauritius is a favourable place for tax planning in respect to venturing into India and African countries”
He is also looking for a factory in this country, which is known for its textile industry. Crocodile currently makes its apparel in China, Thailand and Indonesia but costs there is rising, he said.
This first-ever visit by a Singapore business delegation has generated substantial interest: 24 companies signed up for the trip with the Singapore Business Federation (SBF).
Some, like Intrasia have already dipped their toes into Mauritius waters. But most, such as Crocodile, are exploring options.
Their presence here is in conjunction with President S R Nathan’s state visit. Today, he will witness the signing of a memorandum of understanding between the SBF and the Mauritius Board of Investment to enhance business ties. Last year, Singapore investments here totaled US$15.1 billion (S$18.6 billion), although much is ultimately channeled to India.
There is a potential for more, said SBF Chairman Tony Chew, who added that Mauritius was “a promising business hub” with remarkable similarities to Singapore. It has political stability, a pro-business environment, good infrastructure, a robust banking system and treaties that grant companies residing here preferential trade and investment benefits with Africa and beyond, he said.
As more adventurous Singapore firms look beyond traditional markets to place like Africa, Mauritius – just off the continent – is a good starting point. Exports from Africa to Asia have tripled in the past five years, noted Standard Chartered Bank’s regional Chief Executive for Singapore and South-East Asia, Mr. Ray Ferguson. Mauritius with membership of trade and political groupings like the Common Market for Eastern and Southern Africa, offers companies “preferential” access to a market of 380 million consumers, representing an import potential of US$90 billion”.
With its eye on this pie, spice company Nomanbhoy and Sons is exploring the feasibility of a logistics handling and transport facility here for spices sourced from Madagascar, Comoros, Zanzibar and other islands. It is also considering establishing an essential oils extraction plant.
But there are challenges too, said Mr. Chew. One is the small domestic market. Firms may need to explore an export strategy to gain economies of scale. “The small population also means that certain industries, such as labour intensive ones, will need to depend heavily on imported manpower” Mr. Chew added.
More also needs to be done to the infrastructure. The road network, for instance, is in need of expansion. Still companies like Intrasia have their sights on the longer-term horizon. A combination of government support, land availability and an excellent financial regime was why it chose Mauritius to further its rice-growing ambitions.
Also, as Mr. Robertson noted, “it is Africa that is the fastest-growing rice consumer in today’s world”.
Vitagrain could hold key to solving hunger woes
October 6, 2009
The Business Times Singapore – Chen Huifen
Undaunted by a lack of rice industry in Singapore, a group of businessmen here – including Transview Holdings chairman Tan Ching Khoon – have created a company that could hold the key to solving hunger problems worldwide.
Vita Grain Group, which is backed by US $60 million of funding, owns more than 20 different strains of hybrid rice seeds that give higher-yielding, healthier crops. In field trials, its hybrid lines have been shown to produce as much as 12 tonnes of rice per hectare a year – about three times the worldwide average yield of 3.5-4 tonnes per ha per year.
‘It makes the argument for hybrid so compelling that it’s almost become an international priority for governments,’ said Vita Grain chairman Graeme Robertson.
For example, a hectare of land would need about 20kg of a particular grade of hybrid rice seed to grow a crop. If two crops can be grown a year, 40kg of hybrid seeds would be needed. Since hybrid seeds can only be used once, at US $4 per kg of seeds, it would cost the farmer US $160 a year.
Normal rice grains may be free, but the annual yield of 2 tonne per ha per year achieved in many developing countries is significantly lower than the 10 tonnes per ha per year possible with Vita Grain’s hybrid seeds. Assuming the current raw rice price of US $200 per tonne, the output with hybrid seeds would have raked in US $2,000 for the farmer, while normal rice would only yield US $400.
Apart from its higher yield, Vita Grain’s hybrid seeds also boast of lower glycemic index (GI) levels (high GI food gives rise to diabetes and obesity). The company has already started mass production of the seeds on 50 ha of land in Mauritius. This will be raised to 500 ha of land by July next year and 1,000 ha of land by December next year.
‘More than 1,000 ha of seed land in Mauritius can produce, at 4 tonne per ha, 4,000 tonnes of hybrid rice seeds,’ said Mr Robertson. ‘And you need 40kg of hybrid seeds in one year to grow, say 10 tonnes of rice, but it’s probably 16 tonnes or higher than that. So the capacity is huge.’
The impact on food security issues could also be huge. Although the Singapore-based firm is yet to have formal discussions with authorities here, it says its priority will be to support stock-piling of rice in Singapore – which imports about 330,000 tonnes of rice a year – if the need arises.
The company counts geneticist Abed Chaudhury as its chief scientist and shareholder. Vita Grain is eyeing private equity firms with an interest in food security to raise a further US $10-50 million for expansion.
‘To develop 10,000 ha of rice would cost us about US $25 million. US $10 million of funding, plus our own investment, will cover that,’ said Mr Robertson. He forecasts a 25 per cent return on investment over the next two to three years.
With new investments, Vita Grain will be able to explore further seed production in Asia, the US and South America, as well as rice production using its own seeds. The company is also setting up a rice mill in Mauritius and is in talks with partners in Botswana, Madagascar and Mozambique to develop rice production units that could, at the same time, improve the livelihoods of the local communities.
‘The risk is in infringement of our intellectual property because it takes many years of research and development to reach where we are today,’ said Transview’s Mr Tan, who is executive director of Vita Grain. ‘This is why our people are on the ground monitoring our programmes every day.’
Vitagrain submits proposal to develop 10,000 ha farm in Mozambique
August 13, 2009
PORT LOUIS, MAURITIUS On Thursday 13 August 2009, Dr. the Hon. Arvin Boolell, Minister of Foreign Affairs, Regional Integration and International Trade, chaired a brainstorming session of the issue of Food Security and cross-border agricultural investments in Mozambique.
The Regional Integration Division of the Ministry of Foreign Affairs, Regional Integration and International Trade has been the assigned role of facilitator and coordinator as regards all activities and projects in the Region.
According to Minister Boolell, cross border initiative in the field of food security is crucial for Mauritius. The Government has earmarked a sum of Rs 1 billion through the creation of the Food Security Fund in the 2008/9 budget. This fund was created with the intention to encourage farmers and crop producers to increase food production.
The Minister of Foreign Affairs, Regional Integration and International Trade, has used all its diplomatic weight to acquire prime land with good and appropriate logistics in Mozambique. Over and above the 5000 hectares earmarked for Mauritius on the Central Province, Mozambique has been willing to offer to Mauritius 10,000 more hectares in the district of Marracuene, some 70 kilometers from the city of Maputo, are now available. This land is on the priority list for rice cultivation according to the Mozambican Ministry of Agriculture. Again, not too far from Maputo, a further 5000 hectares has been negotiated.
“The deal we are talking about sounds terrific, both in theory and practice. In theory, we can secure reliable supply of food, mitigate price shocks and reduce speculative commodity trade. In practice, it allows our investors to look beyond frontiers. This is not the time for us to put our proposed mega project on the blackburner. We need to become alert and take a more serious and responsible attitude”, stated Arvin Boolell.
The 10,000 hectares at Marracuene are now subject to a rapid submission of a rice project, and this will be followed by the signing of a long-term lease. It is proposed that the Government of Mauritius takes ownership of the lease and then sub-lease it to a consortium or investors or to lead investors on terms which satisfy both the interests of the investors and the nation in its search for some level of food security.
“I want the project we are going to develop together to be a show case, demonstrate our entrepreneurship skill, our effort to address the food security and our responsibility vis-à-vis our friendly neighbouring countries. We should not be seen as colonisers. We need to bear in mind that any success gained in this project would be a stepping-stone towards similar ventures in other parts of Africa. The doors are open for more investors to join the two lead investors, Vita Grain Ltd of Singapore and the Ning Group in Swaziland. The doors are equally open to new projects on other land to be made available”, Minister Boolell highlighted.
Already, two lead investors have come forward and have shown substantial interest in a rice project covering the 10,000 hectares. The first one is Vita Grain Ltd, a Singaporean company registered in Mauritius already at project stage of developing hybrid rice varieties in Mauritius. It has already submitted its project proposal of $43.5m on the Mozambican rice venture. This project includes milling of the rice. The second one is Mr Gaetan Ning of the Ning Group based in Swaziland and is on successful business in cattle-rearing, vegetables growing and fast-food chains. He is visiting the 10,000 hectares shortly.
Dr Abel Chaudhury, a high-profile rice scientist working both for Vita Grain Ltd and for the Food Security Development Centre having MSIRI & FARC as partners, has proposed a scientific tour at the end of September 2009 on the Mozambican land. In collaboration with the Mozambican Ministry of Agriculture, he will develop pilot plots with some 50 rice varieties. In his view, the outcome of this experiment would provide more reliable answers to the soil/climate suitability.
Vitagrain signs 2nd MOA with Mauritian authorities for 500 ha of land
March 24, 2009
A Memorandum of Agreement was signed this morning between Vita Grain Pte Ltd and Rose Belle Sugar Estate for the setting up of a hybrid rice seed industry in Mauritius. The ceremony took place in presence of the Minister of Agro Industry, Food Production and Security, Mr. Satish Faugoo.
Through this Agreement 500 hectares of land will be released by the Rose Belle Sugar Estate for the development of a hybrid rice seed industry in Mauritius. The Singapore based company Vita Grain Pte Ltd possesses innovative knowledge and expertise for the cultivation of non-hybrid and hybrid rice seed with specialised traits such as low glycemic index hybrid cereal. It uses advanced growing techniques so as to promote the improvement of nutrition and food security in both developing and developed countries.
Some 1 000 hectares are required for the implementation of this project which will also take on board small holders in the future. Mauritius has been opted by the Vita Company for various reasons such as its economic and political stability, its pest and disease free environment and its strategic location.
The Agreement is the second one signed between Vita Grain Group and Mauritian authorities. The first one was signed for the setting up of a hybrid seed rice production centre which involves the Mauritius Sugar Industry Research Institute (MSIRI) and the Agricultural Research Extension Unit (AREU). The creation of this centre in Mauritius will enable these Institutes to further develop research and study into hybrid rice lines and other food crops, thus positioning our country as a regional powerhouse for hybrid seed research in the future.