The Sunday News
ZIMPLOW farm implements unit, Mealie Brand’s export market in the region is under threat from the strengthening of the United States dollar against regional currencies that is leading to its goods being uncompetitive against its rivals, an official has said.
In an interview in Bulawayo on Friday, Mealie Brand managing director Mr Walter Chigwada said the weakening of the Zambian kwacha and South African rand was negatively affecting its export market.
“The challenge of the strength of the US dollar against the rand or kwacha is that we then become uncompetitive. Sometimes we sell our products on credit to our customers and sometimes it would be very difficult for them to be able to pay when the time comes,” said Mr Chigwada.
He said the challenge was beyond their control as it was a regional problem.
“We don’t have much that we can do at the moment because it’s a regional problem where the regional currencies like for example kwacha is weakening,” said Mr Chigwada.
This, he said, meant goods sold to Zambia were becoming expensive for the Zambians.
He, however, said they were working on reducing costs of production so that they could be competitive.
“The onus is on us as to how we can then reduce our costs of production locally and improve on our efficiency so that we can be made competitive,” he said.
The official reiterated that Zambia was their biggest market and they would continue to fight and maintain their presence.
Zambia contributes to more than 20 percent of total sales for Mealie Brand.
The US dollar has appreciated from an average of US$1 to 6,90 Zambian Kwacha at the beginning of the year to around US$1 to 7,37 Zambian Kwacha in June.
“Zambia has been a very good market for us and it’s a market that we will continue to fight for and there are challenges that are happening in terms of competition that is coming on but we can weather it out and continue to face it,” said Mr Chigwada.
The Mealie Brand managing director said the company has managed to shrug off competition brought by goods from the Far East that saw their exports to Zambia taking a tumble in 2012 and 2013.
“In 2012 and 2013 our exports to Zambia went down and that was the time when we were facing competition from China which was bringing very cheap products. But in 2014, there was an upward shift in our exports,” said Mr Chigwada.
He said venturing into the export market was not easy as they met a plethora of challenges.
“It’s difficult to export right now but we should be able to continue putting our products as long we are able to reduce the costs of production,” he said.
“One of the challenges that we have is that the cost of doing business in this country is very high. Even if you look at fuel price alone, we are one of the highest. If you look at the utilities and other costs that feed into our production, they make our goods very uncompetitive and these are issues which need to be addressed.”
