1,300,000 Ha of problems for Daewoo Logistics in Madagascar

“A South Korean company has leased for 99 years a land in Madagascar which sizes 1,300,000 Ha for free in order to grow corn and palm. All of the scheduled production will be exported”

This is the piece of information that I could hear from BBC World Service (FM89.2 in Antananarivo, Madagascar), one month ago when I was at my office.

In the beginning, I cared more about the unusual size of the land. What kind of Agri-business project does require 1,300,000 Ha? Damn! It is more than the lands of QMM (subsidiary of Rio Tinto, Tolagnaro) and Sherrit International (subsidiary of Sherrit International, Ambatovy) gathered as one!

It was when I came home that I knew from my family that the South Korean company was actually the Malagasy branch of Daewoo Logistics Corporation (DWL) and that all the Malagasy daily newspapers have already talked and denounced it some days ago. I was a bit surprised because I have always thought that their “official” business is more about providing logistic and transportation services. This branch has been set up in Madagascar on July 23rd, 2008 and such opening has been used by the Malagasy governement as a good proof of the confidence of International Investors for Madagascar. Does the Malagasy governement know that DWL has nothing to do at all with Daewoo, the car manufacturer?

02 days after, I had a phone call from a British friend who runs a company in Antananarivo. He has heared on BBC World Service that DWL has “imported” some expatriates from South Africa to deal with the corn and palm business in Madagascar. He wanted to know if that was legal in Madagascar. According to the new Malagasy investment law, Malagasy companies, as well as foreign companies (companies which are incorporated according to the Malagasy laws but owned by foreigners), can hire as much as expatriates as their projects may require … How about the famous 5,000 workers from Phillipines that have been recruited by Sherrit International? The investment act has canceled the obligation for expatriates to obtain an employment authorization to be allowed to work in Madagascar. Actually and till now, this obligation remains manadatory.

The staff people who manage the branch of DWL have strongly denied all of these assertions. They said that they are still on the first step of their project in Madagascar, which is: to conduct a technical survey on the quality of Malagasy soil.

Both ministers, Mr. Panja RAMANOELINA (agriculture) and Mr. Marius RATOLOJANAHARY (management of territory), have also confirmed DWL’s assertion.

After a phone talk with one of my sources, I discovered that the branch office of DWL had nothing to do with it. Actually, the company which has dealt with this land matter was a Malagasy incorporated company: Madagascar Future Entreprise (MFE). This company is wholly owned by the branch office of DWL and was set up on August 08th, 2008. The corporate purpose of this company is all about Agri-Business …

My source also told me that MFE actually did nothing wrong but just followed the procedure to be able to get a land in Madagascar. He told me that in fact the so-called “technical survey on lands” (step 01) is already finished and has been delivered to the governement … Why DWL and the 02 above ministers lied if they all did nothing wrong or illegal?

My source also revealed that following the achievement of the first step of MFE’s mission in Madagascar, MFE has already submitted to the EDBM an application to get the famous “authorization for land acquisition” As a foreign company and according to the new investment law, MFE has to apply for such authorization before starting any process to purchase land in Madagascar. But unfortunately, my source could not manage to know if MFE intends to buy 1,300,000 Ha.

But here is the most amazing thing that my source has disclosed to me: after submitting their files before the EDBM to get an “authorization for land acquisition”, people at MFE have sent a detailed report to the headquarters of DWL in Séoul. People in Séoul understood it as follows: “the Malagasy governement has accepted to give for free for a period of 99 years 1,300,000 Ha of fertile land to MFE” Starting from there, Mr. Shin Dong Hyun, financial manager of DWL, all happy, has told the good news to a BBC reporter… and the mess started ….


5 thoughts on “1,300,000 Ha of problems for Daewoo Logistics in Madagascar

  1. Obviously, a whole made-up version of the real story. Logics tell everyone of us that any Korean leaders or someone who has even stopped at high-school level would understand that there’s no such thing as FREE in foreign lands if it were NOT SPELLED in any agreemnt. If what u’re saying has one inch of truth, the basic requirement in any business dealings called “due diligence” would have pushed the concerned Korean party to confirm it with their Malagasy counterparties before going public on it! You’re good at fabricating stories but not good enough man!

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