eBusiness Weekly
The annual State of Industry report issued this week by the Confederation of Zimbabwe Industries starts off with a tale of woe, listing all the challenges facing its members, generally the older and larger industrial concerns.
And none of these is really new. Most could be copied and pasted from at least one batch of earlier reports issued over the last half century.
But careful reading produces some interesting facts. Production volumes are rising, although the CZI seems to regret that only those industries who have equipment less than 10 years old are actually flourishing. We see no reason for regrets.
Industries that produce the right products in the right packaging at the right price are seeing growth with some having to lay on extra shifts. Their management and workers spend a lot less time whining than others, possibly because they are too busy working out how to cope with rising demand than sitting back and complaining that they do not have captive markets for poor quality expensive goods as too many had between UDI and the opening of the economy.
At the same time, the last few years has seen new manufacturing companies established, often a lot smaller than the older firms, a lot more nimble and willing to exploit huge gaps in the markets by setting up decent supply chains for both raw materials and sales. Some indeed appear to contract out the actual manufacture to updated older concerns while they concentrate in what they do best. Many of these newcomers do not belong to CZI although a lot of them once worked for a CZI member, learned their business and then went out on their own.
Anyone doubting that manufacturing is growing should take a drive, or even better a stroll, around an industrial area in Harare. Vacant premises are almost impossible to find and new buildings are going up. Obviously a fair number of newcomers are carving out their place in the sun and the combination of import controls and judicious prioritisation of foreign currency allocations on one hand and the willingness of some industrialists to produce the right products at the right prices has seen Zimbabwean products dominating supermarket shelf space.
Older companies can adapt and grow. One of the first industrial concerns in Harare was Delta, starting off as a branch of Castle Breweries of Cape Town and some of whose original bricks still exist in grounds at the bottom end of Cameron Street. When imports starting dominating Zimbabwean markets after dollarisation Delta first reacted instinctively by calling for protection. It then went very silent until it started inviting people to the opening of its new bottling lines, canning lines, upgraded brewing plants and the like. Soon combining modern manufacturing and packing, plus some new products, with its knowledge of markets and brand recognition it had taken back its markets and now is buying out Zambia’s largest breweries.
Olivine is another partial moderniser. It announced recently that it had completely overhauled and renewed its margarine plant, which possibly explains why half the shelf space most supermarkets devote to this product is now filled with tubs and packs of its products, because, oh yes, it also extended its range.
Even us at Zimpapers, who must compete with Delta as the oldest CZI member, woke up a little later but have spent a lot of money in recent years on commercial and newspaper presses, on radio stations and a whole lot of modernisation.
Newer concerns have also re-invented themselves. Two examples. Seed Co was once a boring company with a captive market and over-reliant on State-sponsored research. It is now a major regional company with proper research and supply chains and marketing strategies that rely on having first class products at the right price. Innscor started off establishing a chain of small fast food shops and innovating a supermarket concern, then set up supply chains, converted these chains into the largest agri-processng company in Zimbabwe and finally dumped its take-aways and supermarkets.
Some complain Zimbabwe does not have an industrial strategy. Well it does, but on lots of bits of paper. There are tax concessions for modernisers; there are rooms full of Government lawyers redrafting laws and regulations to make doing business a lot easier; there are the monetary authorities setting priorities for foreign exchange. All of these changes are making it easier and simpler to set up new business and convert old business.
Sometimes we need to remember that when that asteroid smashed into Mexico 66 million years ago it did not wipe out all dinosaurs. One group of theropod dinosaurs survived and now outnumber, in both species and individuals, the mammals. These dinosaurs had learned to fly and evolved into birds.
The lesson is simple if you are an old over-specialised concern watching your previously protected niche vanish: learn to fly and flourish in change.
