A Great Business Story from Zambia

[AbdiWahab252]

Wow, I wish Somalia will some day have such businesses. We have the land, the livestock but lack the expertise and capital and of course peace.

Zambia's agri-business powerhouse

By Ian Brimacombe
BBC World Service, Lusaka, Zambia

Empty plastic sterilised bottles roll down a Zammilk production line about 50 km north of Lusaka.

It takes less than three seconds for a machine to spray yoghurt into each bottle.

Further down the line, another machine screws the lids on. The bottles are then whisked off to sell in shops.

This factory is not just producing yoghurt, but also fresh milk, cultured milk, and a popular flavoured drink called Zamsip.

Over 25,000 litres of milk products are processed here every day.

The company that runs this processing plant, Zambeef, began as a small butcher shop in the capital, Lusaka in 1991.
“ Agri-business is definitely the future for this country ”

Since then it has grown to become one of the biggest food production businesses in Africa.

Place "Zam" in front of just about any food product, and there is a pretty good chance this company is producing it.

African breadbasket

Zambeef slaughters 60,000 cows a year.

At the same time, Zamchick produces and processes 3.5m chickens. Then there is Zamleather, Zamflour, and Zamshu, among others.

"Agri-business is definitely the future for this country," says Zambeef's managing director, Francis Grogan.

"Zambia has got huge masses of land. We've got very fertile soil, fantastic rainfall and a climate perfectly suited to growing crops."

Many would agree.

But so far, Zambeef stands out as a rare Zambian agricultural powerhouse.

CRUNCH TIME FOR AFRICA
# World leaders will meet next month in London to discuss measures to tackle the downturn. See to the G20 summit.
# Only one African country will be represented at summit.
# This week BBC World News and World Service Radio will be examining how Africa is coping with the crisis, with

Turning the countryside into a viable, sustainable industry on a much larger scale is something people here have talked about for ages.

But until now, it has not happened.

That is because it takes more than mother nature's blessing to turn Zambia into an African breadbasket.

"The problem is money," says Mr Grogan.

"It costs $10,000 a hectare to turn bush-land into farmland. That's just getting the electricity and irrigation up and running," he says.

Loan problems

Then there is the fact that banks in Zambia only make loans in US dollars, and the revenues are generated in Kwacha, the local currency.

That carries the potential of exposing farmers to big losses when the dollar appreciates - as it is doing at the moment.

"It's a very risky business," says Mr Grogan.

The other challenge for Zambian farming has been the country's proximity to its much bigger neighbour, South Africa.

"South African exporters have used their export power to destroy farming potential in Zambia," says Ndambo Ndambo, executive director of Zambia's 300,000-strong National Farmer's Union.

So in light of all this, how has Zambeef done it?

Francis Grogan says the company business model of controlling every stage of the food production chain - including retailing - has been the key to its success.

Mr Ndambo agrees.

"Zambeef is providing leadership in farming," he says. "They can compete with South African producers. They have the muscle."

Small producers

But Zambeef will remain the exception to the rule, says Mr Ndambo, unless the Zambian government begins to make investment in agriculture a top priority.

That, he says, means giving farmers financial breaks, encouraging banks to lend to the sector, and making it more difficult for South African competitors.

"Now is the time for investment in Zambian agriculture," he says.

These days, the government might just be swayed.

Zambia's Agriculture Minister, Dr Brian Chitu, says the government recognises that the country's farmers need incentives if the industry is to continue to grow.

"We don't really believe that agriculture can take off without credit facilities," he told the BBC World Service.

Dr Chitu says the problem of access to credit, which is particularly critical for small-scale farmers, will be addressed in the next session of parliament.

"I intend to introduce a bill in parliament - the agricultural credit act - this we believe will assist small-scale farmers particularly to access money."

Since the downturn, the price of Zambia's biggest export, copper, has more than halved, and mines in Zambia's copper-belt are beginning to close.

Suddenly, the need for a more diversified economy has taken on a new urgency.

When it comes to farming, Zambia certainly will not be starting from scratch.

The country's share of food and other farm products in total exports has been increasing - from less than 5% in the 1980s to more than 20% today.

Zambia is also better able to feed itself, becoming mostly self-sufficient in staple products like wheat and maize.

Now, the Zambeef success story might just provide enough incentive for Zambian policy makers to place agriculture at the centre of a new economic strategy.

[AbdiWahab252]

http://www.zambeef.com/


Wonderful company. Imagine having such companies in the Shabelle and Jubba regions. Somalia could be food self sufficient in years.

[atosh]

zambia
zambia is one of the best countries in africa somalia could learn alot walahi

[atosh]

zambia
zambia is one of the best countries in africa somalia could learn alot walahi

[AbdiWahab252]

atosh,

Zimbabwe used to be a powerhouse in agriculture before Mugabe focked it up.

[atosh]

true zim was good in agriculture but all the farms were owned by whites.Even in zambia all the agriculture industry is white owned. Zambia is big in copper and tourisim.

[FAH1223]

somalis don't know how to farm

its sad they look down on thingsl ike farming and blacksmithing

[AbdiWahab252]

Atosh,

My view is who cares who owns the property provided they pay their taxes, hire many locals, and help ensure the nation gets fed.

Zambia is a chill place with warm, hospitable people from Livingstone to Lusaka to Kabwe and Ndola

[atosh]

i think in agriculture it doesn't matter who owns the business because it provides job, but in the copper industry which is run by the anglo-americans which take almost all the profits so not benifiting the people.

Lusaka and Livingstone are bless but ndola is rubbish.

[FAH1223]

Atosh,

My view is who cares who owns the property provided they pay their taxes, hire many locals, and help ensure the nation gets fed.

Zambia is a chill place with warm, hospitable people from Livingstone to Lusaka to Kabwe and Ndola

yup

[AbdiWahab252]

atosh,

Ndola has seen better days and is better than Kabwe. The airstrip near Kitwe is a shiid hole.

As for the coppermines, Kaunda severely ruined them when he nationalized them in 1960s. He should have made them quasigovernmental instuitions in which the government old a stake but did not run operations.

[atosh]

Ndola use to be the power house of zambia but now it is but the biggest unemploment dump.

Kaunda did not ruin the industry he built schools, univeristies, hositals and basically eveything. In his day everthing was owned by the government but the man who ruined the economy was chiiluba
And remember kaunda was fighting for the independence of zim and south africa so he had a lot of things on his plate and can not be blamed.

[AbdiWahab252]

Atosh,

Kaunda squandered the wealth on many white elephants & on Zimbabwe and South Africa. At indepedence, there was a study comparing South Korea and Zambia who were both on equal footing:

http://zambiagamefieldsjournal.blogspot ... t-act.html
'
And Zambia is, by all credible economic performance measures, is upholding a tradition of poor economic governance and the continued plundering of the national purse. At Independence, Zambia’s per capita income was the same as the Asian Tiger nations; now Hong Kong is 75 times richer, South Korea 25 times richer; and over the last twenty years – as reported by Transparency International Zambia, only 16% of national expenditure went on agriculture, health, education and local government – the very areas supposed to serve the poor.

The translation of shocks brought about by economic mismanagement – particularly when allied with volatile copper and oil markets, can elicit reactions from political leadership which further impoverish their countries. In 1975, following on from a fall in copper prices and a rise in oil prices, President Kaunda issued the infamous Watershed speech, an edict which overnight restructured the economy and lost Zambia a critical mass of private enterprise and government expertise, consigning its poor to a permanently impoverished state, accompanied by the rape of much of its natural resources. The CEE Act of President Mwanawasa will now negate a wave of new investment, of innovative new partnerships with tribal communities that do not alienate the land; and will diminish the growth of democracy.

The CEE has already negated the work of such bodies as the Natural Resources Consultative Forum (NRCF), a neutral platform for stakeholder participation in the management of natural resources - particularly policy formulation, established by the Ministry of Tourism, Environment and Natural Resources (MTENR). Now civil servants of that Ministry are unwilling to participate in its deliberations, knowing that they and the private business sector will be subject to the control and direction of the proposed Citizens Economic Empowerment Commission, itself directly under the control of the President.

[atosh]

I agree the day Kaunda pravitised the industries of the country was the day the zambian economy went down because African countries need foreign investment.
Zambia is very dependant on copper prices if they fall the economy goes down. In 1989 my dad told me the kwacha was 1Dollar=1kwacha.
I believe it was that Chiluba who lead to zambian problems he brought about corruption and now he is on trial for embezzling the country's wealth.

[AbdiWahab252]

Atosh,

I remember how many people celebrated Chiluba's election victory in 1992. It was the first time in Africa since 1967 where two Presidents exchanged power peacefully via the ballot box. The previous time it occured was during the Somali elections of 1967 when President Aden Abdulle lost to PM Sharma'arke.




. But little did they know that the short man was a crook. For all that can be said, Kaunda never looted the nation. His blame was in bad policy making & belief in Socialism. Yet Kaunda did invest heavily in social programs especially in the rural areas.