Zimbabwe was placed
170th out of 189
countries in the most
recent World Bank
ranking for “ease of doing
business”, and while it certainly
has its fair share of challenges,
for Lasher Tools the country
counters the challenges with
opportunities for export
growth, particularly in
mining, non-governmental
organisation (NGO)
projects and agricultural
sectors.
The company is the
largest manufacturer of
non-mechanical tools
in Africa catering to the
mining, agricultural and
construction industries
as well as gardening
and DIY sectors.
Morné Venzke, in
the export marketing
department of Lasher,
told FTW that the main
progress with regard to export
opportunities had been through
major developments initiated by
NGOs. “Lasher has a very strong
Corporate Social Investment
(CSI) programme and we supply
tools for key NGO projects in
Zimbabwe at a reduced rate. This
benefits the NGO but also creates
additional market awareness of
Lasher’s products,” he told FTW.
Venzke says the tobacco
farming industry is also slowly
getting back on its feet – though
on a much smaller scale – which
provides an opportunity for
Lasher to supply its agricultural
products to the farmers. He
adds that 20-30% of Lasher’s
total turnover is from exports,
including to the United Kingdom,
Australia, the United States and
Africa.”
Despite good demand for the
Lasher products in Zimbabwe
there are still major trade
challenges in the country
notes Venzke, listing seven key
challenges that he believes need to
be addressed to ensure facilitation
of additional and ongoing trade
and investment.
1. Import duties
Despite the fact that Zimbabwe
and South Africa are Southern
African Development Community
(SADC) partners and that there
is enough market demand for
local and imported products,
the country still imposes a 15%
import duty on hand tools. “We
need the department of trade and
industry (dti) to address this,” says
Venzke.
2. Chinese imports
Despite superior quality
products which carry the South
African Bureau of Standards
(SABS) endorsement, exporters of
products catering to the mining
and construction industries in
Zimbabwe are losing government
import tenders to their Chinese
counterparts. “The Chinese are
investing heavily in African
development projects and, instead
export opportunities, will bring in
their own people and import their
own tools,” says Venzke.
3. Building market share
To retain the edge in an
increasingly competitive market,
Lasher embarked on an extensive
marketing and awareness
campaign to gain market share
in Zimbabwe by highlighting
the quality and durability of the
products. “We increased our
advertising spend, attended trade
shows, did in-store displays and
created videos that tested the
claims, “he says. Lasher embarked
on the campaign two years ago
and has seen a “good increase” in
sales.
4. Zimbabwe’s policy of
indigenisation
The country’s policy forcing
foreign firms to distribute
51% of their shares to meet the
indigenisation law is sure to scare
investors off, with AFP reporting
that there is still no clarity on how
the cash-strapped state will fund
its big-stick approach, analysts say.
“These decisions, along with
ongoing international sanctions
against the country, create a
negative business image of the
country and limit opportunities
for trade growth,” adds Venzke.
5. Volatile pricing
The majority of Lasher’s
products are manufactured from
steel, but the volatility of steel
prices resulted in the company
looking at other materials which
offer the same, or superior,
quality and durability. “We have
started producing products
made from polyethylene, a
UV-resistant, economically
friendly and environmentally
responsible material that is even
more durable than some of its
steel equivalents,” says Venzke.
He told FTW that there was a
strong demand in southern Africa
for the garden range of tools
manufactured from polyethylene.
“Again, as a result
of our awareness
and education
campaign,” he
adds.
6. Liquidity
While a lot of clients
want credit, they need cash to
complete trade transactions as
liquidity currently remains a
“huge challenge” in Zimbabwe,
notes Venzke. He says that
strategically the company has
found a way around this but he
advises “extra caution” when
dealing with credit in the country.
7. Counterfeit goods
Lasher is working with the
relevant authorities to counteract
the production and sale of
counterfeit goods, not only sold
informally but in retail stores
too. “The counterfeit goods are
so close to the real thing that we
often have to incur extra expenses
for the verification process,”
Venzke said.
TIPS & TRENDS
Venzke confirms that there
is a growing trend for
exporters not to keep stock
of certain products due to
expenses associated with
storing them. However, he
says, the transportation of
consolidated loads is much
more expensive and needs a
long lead time. “Those that
do supply on an as-needed
basis often miscalculate
the time it takes, not to
mention unexpected delays,
to get the product to its
destination. And when it
does reach its destination
the client has often sourced
another product elsewhere,”
he notes. Ensuring that it is
sourced urgently shoots the
transportation costs even
higher. “We have found,
based on our experience, that
those who keep excess stock
tend to make more money in
the long-term,” said Venzke.
INSERT
Did you know? In 1928 the African Shovel Company introduced the first-ever shovel to
the South African market. Today the company is known as Lasher Tools
CAPTION
Morné Venzke
