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
