Makeka Mollometsi

  • Sector: Distilling & blending of Agave spirits + accommodation and hospitality
  • Geographical Location: Lesotho
  • Responsible Ministry or Institution: Makeka (Pty) Ltd / Makeka Mollometsi Foundation / Makeka Holdings (Pty) Ltd & Lesotho National Development Corporation (LNDC)
Project description

Makeka is a multi-pronged business concern, geared towards the large-scale quality beneficiation of aloe and agave lifestyle products predominantly through, but not limited to Lesotho and South Africa; to create sustainable wealth through sound ecological, social and business ethics in partnership with communities and business at large for global markets.

Mollometsi (Mollo – Fire; Metsi – Water) is an African branded alcoholic beverage product using established historical and modern techniques to produce and bottle a range of premium and entry level “Firewater(s),” from the agave plant. The Firewaters will be developed as the basis of new cultural products including uniquely developed African cocktails and culinary experiences for more popular global and regional consumption.

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The core business pillar will be primarily Lesotho-based bottling distillation and packaging, distribution and sales of Mollometsi for the global market.

The business is also looking to establish a 4 star boutique hotel at a demonstration farm in Butha-Buthe, which will also have a spa and mud baths; conferencing facility for groups of up to 100 people; a restaurant and spirit bar for tasting and sales; a chapel; staff housing; a library and the potential of a nine hole golf course.

Subsidiary business activities

Subsidiary business activities will be the production and sale of the following Mollometsi lifestyle products using by-products of the Agave sisalana and Agave Americana in the longer term:

  • Fashion /furniture design using Agave sisalana
  • Cosmetics and skincare using Agave Americana
  • Paper production
  • Sweetener
  • Industrial diamond production
Project objectives

The project has substantial and experienced partners operating at the regional and international scale. An investor, potentially with experience in the sector, (but not essential) is sought to inject capital and support the development of the world’s highest altitude eco-distillery for the production of spirits from Agave and other sources; as well as a 20 bed 4-star boutique hotel, on-site spa, and events venue to offer a wide range of activities to create African luxury products.

The ultimate aim, along with providing a profitable opportunity for the eventual developer and operators of the site, is to transform the lives of up to 100 000 people in Lesotho and South Africa through direct and indirect work opportunities and for up to 1 000 persons long-term; and to empower women and youth, through a workforce that targets 60% women / youth involvement and improve agricultural practices in rural areas, as well as combat soil erosion in Lesotho and South Africa, which are mutual threats to water, economic and social security.

Revenue sources include: rooms rates F&B, conferencing, spa treatments, golfing and fees from various activities. The tourism success of nearby Clarens in South Africa provide a good basis for good occupancy rates.

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Maletsunyane / Semonkeng Falls in Lesotho is the highest single-drop waterfall in Africa
Current studies conducted:
  • Feasibility study on proposed site (2010)
  • Product design concluded (2016)
  • Distillery process design concluded ( 2016)
Project size / cost (+/-):
   4 Star Boutique Hotel M46, 000,000
   Spa + Gym M55,429,920
   Library – Art Gallery M38,785,500
   Chapel M6,037,200
   Conference Center M8,002,800
   Staff Housing M11,182,860
   Civil Engineering, roads/works M9,000,000
   Estate sub-total costs ±M174,438,480
   Distillery, Bottling and Packaging ±M60,000,000
   Agriculture Estate establishment ±M17,500,000
   Total fixed Estate costs ±M251,938,280
±$17,500,000
±£12,250,000
±€15,925.000

M = Lesotho Loti (plural: Maloti)

(Costs exclude costs incurred to date and/or operation costs toward establishment and unforeseen regulatory compliance costs. Contingency estimation percentage – 10%)

Proposed procurement process:
  • Joint Venture, partnership, angel investment, profit share participation

Planned dates and estimated project duration

1st quarter 2016:
  • Brand concept (complete)
  • Land identification for estate (complete)
  • Distribution partnership – RSA, China, EU (complete)
  • Completion of preliminary distillery design, bottling, labeling and infrastructure needs (complete)
  • Completion of legal framework, Trademarking, Intellectual Property assignments (ongoing)
2nd quarter 2016:
  • Confirmation of distribution/marketing plan
  • Submission of business plan to Lesotho National Development Corporation (LNDC)
  • Confirmation of land for distillery estate, LNDC
  • Confirmation of Agave nectar supply (Lesotho, South Africa [complete], Mexico)
  • Confirmation of land strategy and supply chain linkages, including Graaff-Reinet / RSA infrastructure
  • Presentation of business plan to Commonwealth investment promotion event, UK
  • Submittal of business plan to Industrial Development Corporation (complete)
  • Presentation of business plan to Lesotho Pension Fund
  • Confirmation of stakeholder management, partners and institutional matrix
  • Site visit to Herradura Hacienda
  • Meet with Mexican master distillers
    • Explore skills transfer on land management
    • Exploration of Mexican supply of agave nectar, etc.
    • Exploration of Mexico-Lesotho trade potential
    • Testing of Lesotho sourced Agave in Mexico for distillate potential
    • Presentation of Makeka Mollometsi distillery design to Herradura – peer review and best practice
  • Environmental impact assessment and compliance of agri-processing, import and export
  • Community engagement
3rd quarter 2016:
  • Fundraising and partnership agreements
  • Secure final bottle prototype for mass production sign-off (underway)
4th quarter 2016:
  • Implementation of marketing strategy and brand association campaign
  • Implementation of fund agreements
  • Implementation of land agreements
  • Community engagement
  • Monitoring and evaluation
  • Registration with various industry events, competitions and spirit awards for 4th quarter 2018
1st quarter 2017:
  • Completion and implementation of EIA reports
  • Plan approval for construction and access works
  • Community engagement
  • Monitoring and evaluation
  • Trial product launches and testing with master distillers to finalise taste specification
  • Refining AGOA arrangements and supply chain design
  • Confirm bottle manufacturing contract
2nd quarter 2017:
  • Implementation of distillery estate construction (completion date 2nd quarter 2018)
3rd quarter 2017 – 4th quarter 2017:
  • Launch to market of teaser products
1st quarter 2018 – 4th quarter 2018:
  • Large-scale market launch in RSA / Commonwealth countries

Project documentation available:

  • Marketing strategy
  • Engineering process design for distillery, bottling, packaging
  • General costings
  • Business plan
  • Redacted financials
  • Product design material, flavour concept, packaging
  • Participant competencies + track record
  • Market analysis
  • EIA scope report
  • Lesotho market analysis
  • Caledonspoort hospitality site analysis
  • Tourism analysis
  • Trademarking folio
  • Schedule of accommodation
  • Total staffing requirements, ranks and salary levels
  • Distribution Strategy for Southern Africa, Europe and Asia
  • Letters of Intent from potential Hotel, Spa, Golf operators
  • Technical strategy for climate change funding and associated eco-principles
Government guarantee or involvement:
  • Policy sponsorship, land allocation for distillery estate, land identification for plantation, infrastructure energy/water supply, visa facilitation for scarce skills as per business model
Financing status, amount & structure required:
  • Total project CAPEX vision: M260-million (Ex on costs + operation/agri-trading, etc. M12-million P/A for six year cycle)
  • Equity: Joint Venture 30% equity, but a sliding scale on profit share up to a maximum of 70% until capital outlay has been amortized, to revert back to profit share/equity parity, with option to buy out after year 12
  • Bridging finance for development phase/further technical studies, skills transfer, training

Note: M = Lesotho Loti (plural: Maloti)

Contact

To discuss the opportunity or for the most current update on project progress, outstanding actions and investment requirements, please contact the LNDC (Lesotho National Development Corporation).

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