Popping Millions Into Mozambique

Published 12 years ago
Popping Millions Into Mozambique

It’s a warm, overcast, spring afternoon in Julius Nyerere Avenue in the heart of Maputo amid the hooters and rattle of people driving home from work through the potholes. On the side of the road in front of brand spanking new bank headquarters, a group of urbane bankers chat quietly and shift from foot to foot in expectation.

The building used to be a hotel as rundown as the streets that run by it. “This was a ruin; now look at it,” says one of the senior managers proudly. A small curious crowd has gathered. The word is out that one of the richest men in the world is about to arrive. A car sweeps in like a summer breeze off Maputo Bay; a group of people jump out. “Which one is he?” says someone nearby.

Banco Unico branch in Maputo, Mozambique; 15 September 2011 – Photo by Brett Eloff.


Closing the door behind him is the man himself, dressed in grey suit, with a red-striped shirt and matching tie; Américo Amorim—the 212th richest man on earth, according to FORBES in 2010, worth an estimated $4 billion. With a gentle smile and handshake, he blends into the waiting crowd of bankers and could be one of them. If you are looking for a billionaire who wears his eminence lightly, look no further than this man; a man who not only admires Nelson Mandela, but also appears to subscribe to the great man’s approach to humility.

Make no mistake, there is an iron will behind the smile and a reputation in Maputo—born of his latest deal—as a tough negotiator. Amorim, who made a fortune from putting corks into the world’s bottles, was in Maputo to see where a chunk of his fortune has gone. The 77-year-old entrepreneur’s empire is in a joint venture with Portuguese conglomerate Visabeira, which owns 61% of Mozambique’s newest bank, Banco Unico, which has opened in Maputo with $20 million in initial equity share capital. The remainder, aside from a small stake for management, is owned by Mozambique-based private companies and pension funds.

High-rise construction in Maputo, Mozambique; 14 September 2011 – Photo by Brett Eloff.

Amorim, speaking through aninterpreter, is not fazed by his lofty FORBES ranking: “I am indifferent to that. My passion is to build companies… My happiness is to be busy.” Amorim has certainly been busy for almost his entire adult life. He took over the management of the family cork business at the tenderage of 18, when his parents died; from that moment, according to his close colleagues, Amorim has worked at least 12 hours a day in more than half a century as an entrepreneur. The Amorim Group has its roots in a small family cork business started by Amorim’s grandfather in 1870. The business is based in the tiny town of Mozelos, 19 kilometers from Porto, near the Portuguese forests, which hold more than half of the world’s cork. The young Amorim took to the family business with a will and travelled the world to sell cork.


In 1958, he journeyed to the then unfashionable Soviet Union and Eastern Bloc to strike deals. It made his company Portugal’s biggest exporter to Eastern Europe. In 1962, Amorim invested 75,000 euros ($102,000) in the business, to modernize and mechanize; the company consolidated cork production in Portugal and down the years expanded into Spain, Tunisia, Morocco, Algeria and Sardinia.

Nearly 60 years on from the young Amorim’s first day in the office, the family empire declared sales of 457 million euros ($621 million) in April and posted profits of 20.5 million euros ($27.8 million) for 2010. The company is the world’s largest manufacturer of corks, making three billion a year. One in four corks popped around the globe is made by Amorim’s company. Like the corks, Amorim’s investments have also popped up far and wide, including: 33.44 % of GALP, Portugal’s energy company; a share in Spain’s third largest  financial institution, Banco

Popular; and in BIC, a commercial bank in Angola. Despite this vast wealth, Amorim has no time for fast boats and private jets—corks are his business and passion. In fact, rare passion flows in the interview when the thorny subject of plastic bottle stoppers comes up. “Plastic is not appropriate for wine.

Nature never spoils. The champagne industry has been in existence for 320 years and it has never stopped using corks. Corks are always preferred by people with good taste. It (plastic stoppers) is a bad taste idea,” he says. So why is this man, with a passion for corks, throwing millions into Mozambique’s often uncertain banking sector with its past allegations of corruption? Legendary investigative journalist Carlos Cardoso was gunned down in a Maputo street in 2000 while at the heart of an investigation into corruption in banking in Mozambique.


Portuguese billionaire & majority shareholder of newly launched Banco Unico, celebrates the opening of the bank’s headquarters in Maputo, Mozambique; 14 September 2011 – Photo by Brett Eloff.

A lot has changed in the last 10 years, but there is still talk among sources in the know in Maputo of murky goings on in the banks. But Amorim is unconcerned. “I don’t consider Mozambique a risk. It has stability and its institutions are functioning. It is a rich country with a lot of raw materials and minerals… I have investments in 37 countries around the world, including Europe, and even there, there is corruption. It’s not a thing that bothers me.” The rewards for risk in Mozambique could be high for those with light feet and an eye for a fast return. In the week that Amorim landed in Maputo, the first coal exports from the mighty Moatize project, near Tete in the north-west corner of the country, was railed down the Sena railway line and exported through the northern port of Beira.

The Moatize expects to ramp up to four million tons of thermal coal a year, for electricity production. It has a target of 52 million tons by 2026, according to consultants working on the project. On top of this, BHP Billiton runs the Mozal smelter, just to the south of Maputo; South African energy giant Sasol is investing $300 million into the Pande gas field 600km north east of the capital. In Maputo itself, foreign investors have brought the swinging construction cranes back to the skyline as they build offices and homes for the newly wealthy.

Mozambique, once the poorestcountry in the world, where less than two decades ago even food was scarce, is growing fast and the financial industry is growing with it.


A report by KPMG in 2009 said the banks of Mozambique were highly profitable, despite the international financial crisis, seeing a profit of $116.4 million for the year, up 17.9% on 2008. Revenue from loans grew by 13.3% and bad debts were less than 2%. New anti-corruption laws are on the way, even though they are greeted with scepticism by many Mozambican business people. “It will exist only on paper,” chuckled a young Mozambican entrepreneur over a beer in a nearby restaurant.

One Mozambican who is bullish about his economy, to say the least, is Joao Figueiredo, the home-grown CEO One of the many cranes operating in the heart of Maputo of Banco Unico. He predicts that the economy will grow at 10.5% by 2013, compared to the current growth of 6.6%. Even so, Banco Unico could struggle to lend in the early days in the face of high interest rates. The International Monetary Fund is urging Mozambique to keep a tight monetary policy to fight inflation of around 12.8%, even at the risk of a slowdown in the economy.

Despite this, the repo rate came down in August, but before anyone got too excited, it went down to 16%. Couldn’t this be a problem for the new bank on the block? Not exactly, says Figueiredo. “When you look at the market you have to look beyond the short term to the long-term possibilities of Mozambique… The economy appreciates in terms of long-term. There is potential for the future, especially in the mining sector. The stability of the inflation rate and itsdecrease from the beginning of the year is a good sign.” Banco Unico is trying a different approach to break into a market which is dominated by four major banks. Its branches are all designer furniture and soft background music, more airport lounge than bank; there are no queues and there’s coffee while you wait for your consultant to deal with you one-on-one.

It is clear that the bank is aimed at the moneyed middle class, which, the cynics point out, excludes most of the population. Fernando Lima, a veteran Maputo journalist, says: “There are inefficiencies in the banks here. They are expanding but don’t have the human resources to keep pace. There is a lot of poaching of top staff. People also want to see more competition among the banks.” Figueiredo says: “The four biggest banks have 90.2% of the market. It is a concentrated market. There is competition, but there is room for more.


Room to grow as a financial system… The system is not yet mature and that contribution we can give to the market. There is space for more banks, but there are things you need to know before coming to Mozambique. You can’t come with foreign concepts because they won’t work here.” Banco Unico plans to go regional in the future; it appears the world’s 212th richest billionaire is in for the long haul. The interviews in the offices overlooking Maputo harbor, conducted to the crash of waves below, are over. It is night now and the many colored lights of the ships in the harbor shine forth like beacons.

As I thank Amorim for his time and patience he says, through the translator: “You don’t get tired when you love what you do.” For now, Amorim loves putting foreign direct investment into Mozambique, an emerging economy that needs it more than most.