The Sunday News
Judith Phiri, Business Reporter
THE Government has said an additional cigarette manufacturing plant is under construction, with a current production of 1.6 billion sticks per year, with the plant set to increase capacity by 50 percent in the first half of 2024.
Currently, seven cigarette manufacturers operate in Zimbabwe, with a combined production capacity of around 5 billion cigarette sticks per annum.
The development is in line with the Tobacco Value Chain Transformation Plan was launched in 2021 to provide a roadmap for increasing production to 300 million kilogrammes (kgs) annually, and to enhance value addition and beneficiation from 2 percent to 30 percent, while building a US$5 billion industry by 2025.
Cabinet on Tuesday considered and adopted the update report on the Tobacco Value Chain Transformation Strategy, which was presented by the Minister of Lands, Agriculture, Fisheries, Water and Rural Development, Dr Anxious Masuka.
In a post-Cabinet briefing, Information, Publicity and Broadcasting Services Minister, Dr Jenfan Muswere said the nation is informed that 98 percent of Zimbabwe’s tobacco is exported to over 60 destinations.
“Over 52 percent of the tobacco is being grown by beneficiaries of the Land Reform Programme, and is generating 54 percent of annual value. Tobacco contributes substantially to economic development of the farmers, whose average gross earnings are over US$7 000 annually per grower,” he said.
“The nation is further informed that the number of growers has increased 17-fold since the commencement of the Land Reform Programme, indicating the success of the Land Reform programme, with over 85 percent of the tobacco currently being grown by the smallholder sector.”
The Minister said the average yield has also increased, since farmers have gained experience and are enjoying better agronomic support by merchants and a conducive policy environment and advisory role played by the Government.
Dr Muswere said the average price paid to farmers has increased by 80 percent from year 2000 to 2023, again attesting to better quality tobacco produced from experience gained.
He added: “The nation is further informed that the average price paid this year is 18.19 percent firmer than last year. The average price at the auction floors is currently higher than that at contract sales, even as these are still early marketing days. The Tobacco Industry and Marketing Board is monitoring the situation, together with the Tariff and Competition Commission and the nation will be kept abreast of developments on the matter.”
The Minister said the value of local tobacco purchased has increased from US$650 million in 2022 to US$897 million in 2023.
He said out of this amount, tobacco purchases using local financing were US$61.4 million in 2022 and US$73.2 million in 2023, while for the 2024 tobacco marketing season, the recorded intentions for local financing amount to US$81 million.
Dr Muswere said the nation is informed that there are opportunities to increase the level of value addition and beneficiation of tobacco into cut rag and production cigarettes, from 2 percent of total tobacco produced to 30 percent.
