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Govt. banks on farmer cooperatives to develop agribusiness
October 22, 2019 / Gloria Mbwana

There is a need for the country’s small-scale farmers to form cooperatives if they are to graduate from subsistence to commercial farming.

Registrar of Cooperatives in the Ministry of Industry, Trade and Tourism Wiskes Nkombezi said this atthe official launch of the Cooperative Development Activity 4 (CD4) project which is being implemented by US premier agribusiness company, Land O’Lakes, with funding from USAID to the tune of $1.7 million.

Nkombezi said: “The Government of Malawi is encouraging farmers to come together, through cooperatives and pursue farming as a business; the CD4 comes in as a part player, joining the Government of Malawi and other development partners to further this agenda”.

He expressed gratitude towards development partners who are taking part in strengthening farmer based organizations saying it would be difficult for the government to succeed in the project without their support.

“Collaboration is very important. Therefore, I take this opportunity to request all partners present today to synergize your efforts, as we all continue to contribute to the development and growth of the Cooperative Movement in Malawi. We will achieve the goal of sustainable economic growth and poverty reduction if we continue working together”, Nkombezi said.

The CD4 aims to improve the cooperative enabling environment by strengthening apex organizations and by promoting a Cooperative Learning Platform, enhance cooperative business performance through tailored technical assistance and to advance development communities support for cooperatives through supporting research in cooperatives and disseminate findings through both local and global channels.

Nkombezisaid the project is important to strengthen cooperatives as some collapse due tolack of knowledge on how to run them as business enterprises.

“Cooperatives need technical capacity strengthening to support their sustainability and growth. If cooperatives are strengthened in aspects of business operations, they are empowered to make sound business decisions which in turn enhances their growth,” Nkombezi said.

In his remarks, USAID Office Director Cullen Hughes said CD4 has come in at an opportune time when Malawi government and development partners are strategizing on the implementation of the National Agricultural Policy (NAP).

NAP emphasizes on developmentof farmer organizations as a key intervention for driving Malawi’s agricultural development.

“In response to the need for strong farmer organizations in the operationalization of the NAP, the Department of Agricultural Extension Services has developed a strategy for farmer organization development to which the program being launched today is closely aligned,” he said.

Agriculture remains the driving force of Malawi’s economy contributing approximately one third of the country’s Gross Domestic Product (GDP) and nearly 80%of export revenue.

Business
Nyasa Cooperative calls for more investment in ASMs
November 30, -0001 / Gloria Mbwana

A grouping of Artisanal and Small-scale Miners (ASMs) the Nyasa Mining Cooperative Society says there is a need for Malawi to heavily invest in the ASMs in order for the country’s gemstone products to compete on the world market.

In an interview with Mining & Trade Review, the Cooperative’s chairperson Percy Maleta who was part of a team of local ASMs who showcased products at the International Expo in Beijing, China says as Malawian ASMs, they have learnt that through adequate government and private sector investment in the subsector, other countries have modernized ASMs operations.

“Our friends this side of the world have modernized their mining industry including their ASMs while we are stuck with pick and shovel. Malawi needs heavy investment in the ASMs in order to beat international marketing,” he says.

He explains that through the expo, local ASMs have learnt how business should be done to develop the ASMs subsector in Malawi, which is very young.

“Rubbing shoulders with experienced professionals in the sector was a big boost,” he says.

Maleta proposes that when opportunities arise for local ASMs to showcase at such high profile events, government should help them to secure pavilions by subsidizing costs just as governments of neighbouring countries do in order to enable their ASMs market their products at trade fairs and gemstones exhibitions.

He says: “Zambia is always represented by its ASMs at all major gemstone shows.”

“Zambian ASMs have over four pavilions at the biggest gemstone show in the world in Tucson, Arizona heavily supported by their government.”

“We hope Malawi government will be doing the same.”

Maleta says it is very unfortunate that Malawi has not been aggressive in promoting the ASM subsector as compared to its peers though the country is on the ladder as the next destination for gemstone suppliers owing to more discoveries of minerals that continue to be made.

He, therefore, says it is imperative for Malawi to use this discovery of various minerals to its advantage.

Maleta says: “For Malawi to improve as a country to ensure that our gemstones are competitive on the market and the ASMs subsector adequately contributes to the economy, there is a need for change across the board.”

“Government should seriously consider making ASMs licensing flexible so that we are able to get licenses in all mining hot spots”.

“This can also be done at district level unlike the set up now where a prospective miner has to travel all the way from Marka in Nsanje to Blantyre or Nthalire in Chitipa to Mzuzu just to pay a MK2000.00 for a prospecting license for the district.”

He says such centralization in issuing small-scale mining licenses is encouraging the citizenry to do illegal mining.

Maleta also urges government to invest in ASMs training in mining, value addition and marketing and clearly spell out ASMs subsector support in the national budget just as the case is with small scale agriculture where there are extension workers, lots of subsidies and support.

The Beljing Expo ran from September 15 to 30, and the cooperative was also expected to exhibit at another show in USA from September 5 to 12 under the sponsorship of Export Development Fund (EDF). However, the USA show has been rescheduled to February 1 to 8, 2020.

“We are very thankful to EDF and this is what we are looking forward to as ASMs. We ask other organization to emulate as it is through participating at these shows that we gain the exposure and strike deals,” he says.

In the USA, the cooperative will showcase Malawi gemstones in Tucson, Arizona and at Malawi Embassy in Washington DC.

Maleta says: “It is my wish that the Ministers, Principal Secretaries, and Directors of the following Ministries; Natural Resources, Energy and Mining: Industry, Trade and Tourism; Finance and Economic Planning; and Foreign Affairs and International Cooperation at least attend one gemstone show to really appreciate and understand what other countries that are excelling in the ASM subsector are doing.”

“Let them start with the biggest gemstone and mineral show in the world in Tucson Arizona next year in January or February. These decision makers need exposure just like the miners and we trust that this request reaches them in good faith.”

At the Beljing Expo, Maleta says the Cooperative met five prospective buyers of Malawi gemstones and other minerals and prospects are high that it will sign contracts with the buyers.

He, therefore, describes Nyasa’s attendance of the Expo as a success but says since marketing of Malawi gemstones and minerals is an ongoing exercise, the Cooperative will be attending all major international exhibitions.

Business
Lafarge storms market with Instacrete ready mix concrete
October 14, 2019 / Wahard Betha

Cement manufacturing giant LafargeHolcim Malawi has taken the market by storm with the launch of Instacrete Ready Mix Concrete, which is the first commercial ready mix concrete to be introduced on the Malawi market.

Lafarge CEO Albert Sigei said at the launching ceremony of the Ready Mix Concrete at the Company’s Central Region offices in Kanengo, Lilongwe, that the new product will simplify the building process for contractors making it faster, better and safer as compared to the man mixing process.

Sigei said; “Building solutions around the world have been evolving; and the same needs to happen in Malawi. As a country with one of the highest urbanization rates in the world, it is expected that the demand for infrastructure development will be high.”

“Building solutions that provide faster and higher quality materials for the development of that infrastructure are, therefore, critical at the current stage of our country’s development.”

Instacrete Ready Mix Concrete will be produced by InstaCrete Limited, a subsidiary of Lafarge.

Lafarge also launched a concrete laboratory that will support InstaCrete through provision of technical services by ensuring that the concrete mix designs are innovative and tailored for different building projects.

“This laboratory has the capability to develop concrete mix designs, test aggregates and provide technical expertise for major concrete structural work. The laboratory is open to all customers that may wish to use these services,” he said.

Lafarge’s Head of Marketing and New Solutions ChikondiNg’ombe, urged building contractors to start using Instacrete Ready Mix Concrete saying it is far much better than the man mix process which on some occasions has resulted in the collapse of the structures due to poor mixing.

“It is difficult to control quality using the man mixing process as some mixer’s overdose on some materials,” she said.

Lafarge has only introduced the new product in Central Region but Ng’ombe said the Company has planned to introduce the Concrete in Northern and Southern Regions since there is rising demand for the product which shows that the market is ready for it.

“We have a readily available market for the product and we have already started supplying to some major Lilongwe construction works including Area 18 interchange,” said Ng’ombe.

Formerly Portland Cement Company, LafargeHolcim Malawi has been a leading building solutions provider in Malawi for over 60 years providing innovative building solutions serving masons, builders, architects and engineers.

Lafarge’s cement brands include Supaset (CEMII 42.5R), Duracrete (CEMII 32.5N), Kumanga (MC 22.5X), and Khoma (MC5).

The Company also produces SupaLime (hydrated lime) and, according to Ng’ombe, other innovative products are in the pipeline.

Business
Dangote curse
August 26, 2019 / Admin

Imports grab 30% cement market share Local manufacturers cry foul

 

There is a growing influx of imported cement brands, mainly the popular Dangotecement, on the Malawi market which is continuing to pose stiff market competition to the local brands in so doing threatening the future of Malawi’s cement manufacturing industry.

Investigations by Mining & Trade Review have revealed that Dangote Cement is emerging as a dominant foreign brand on the local market mainly in the major cities of Blantyre, Lilongwe and Mzuzu, squeezing out brands for local producers Lafarge Holcim Malawi, Shayona Cement Corporation and Cement Products Limited (CPL).

Statistics from local cement manufacturer Lafarge Holcim Malawi indicate that the imported cement has grabbed up to 30%   cement market share.

Malawian traders are mainly importing Dangote Cement from Zambia where the African giant manufacturer has a plant in the City of Ndola.

Cement shop owners Mining and Trade Review interviewed in Lilongwe said the diminishing presence of locally produced cement on the market is due to higher prices of the local products as compared to imported brands of similar quality and strength.

“In my shop, you would find that a local cement brand of lesser strength is being sold at MK6500 which is the same price for Dangote cement with a grade 42.5R. So the local buyers prefer Dangote other than the local brands which entices us to order more quantities ofDangote cement,” said a cement distributor interviewed in Lilongwe Old Town, who preferred anonymity.

Mining & Trade Review got similar sentiments in random interviews with shop owners in Blantyre where besides Dangote there is an influx of other foreign cement brands including Ultra-Semi, PPC, Shuwa Cast and Sinoma, whichis manufactured by China Materials Company Limited Group – a Chinese multinational with branches in a number of African countries including Tanzania and Zambia.

Our investigations in Blantyre also revealed that some foreign cement brands are being smuggled in huge tonnage into Malawi from Mozambique, mainly through the Muloza boarder in Mulanje.

We also established that Dangote is a preferred choice for some construction companies which are hired by government to undertake large-scale construction projects which manifests that the government is issuing licenses to traders to import huge quantities of the foreign brand.

“We, contractors, opt for Dangote because of the pricing aspect. Ordinarily, the difference in prices between Dangote and local cement of the same strength needed not to be that much,” said a Blantyre-based Construction Entrepreneur Christopher Beula.

In Mzuzu and Mzimba, our investigations showed that though local brands mainly for Shayona Cement are in abundance in shops, Dangote is also emerging as a big    competitor.

The Mzuzu Hardware shops are selling DangoteCement 42.5R at K7,000 and Shayona’s brands Thanthwe 42.5R and Akshar 32.5N at K6,000.

“We are used to the popular brands such as Akshar here though over the past few years Dangote seems to be winning a market share,” said a consumer in MzimbaVincent Gondwe.

Shayona Cement Corporation Operations Manager PrajeeshPadmanabhan commented on Mining & Trade Review readers’ forum that locally produced cement brands are encountering stiff competition from foreign brands because the taxation regime in countries such as Zambia from where most of the Dangote cement is imported is more favourable to manufacturing and export business while that of Malawi supports imports.

Padmanabhan said: “Zambia is already charging surcharge and duties if you have to import cement but Malawi does not charge any other tax a part from VAT (Value added tax).”

“Countries such as Zambia are also giving long tax holidays to manufacturers so any investor will be interested to invest in Zambia and export to its neighbouringcountries where there are no any duties.”

“Already Zambia has an excess production capacity while Malawi continues to saturate the market with imports that are draining foreign exchange.”

Responding to comments by Mining & Trade Review readers who raised the point that Malawi Government is not protecting the local cement industry as a way of abiding by the Common Market for Eastern and Southern Africa (Comesa) and Southern Africa Development Community (Sadc) free trade rules, Padmanabhan said it is possible for Malawi to protect the local industry by charging surcharge or through licensing as countries such as Zambia are doing.

CPL Chairman Aslam Gaffar concurred with    Padmanabhan in bemoaning the current business scenario for local cement manufacturers describing it as unhealthy.

Gaffar said: “There is a problem with Sadc and these other regional treaties. Imports are tax free and yet locals in same field are heavily taxed.”

“Malawi will remain forever a dumping ground if we do not activate the Anti-Dumping and countervailing rules provided in these treaties.”

“Zambia charges a 40% import excise duty, plus 5% surcharge then 16% VAT for any cement imports, in Malawi not even VAT because our country has got its own Guptas.”

Lafarge Holcim Malawi’s Head of Marketing and New Solutions ChikondiNg’ombe said it is imperative for the government to ensure that there is a level playing field so that cement imports do not get an upper hand over locally produced products and also for Malawian exports to be   supported.

“The level of cement imports into Malawi has risen over the recent years to account for close to 30% of Malawi’s cement market. While we appreciate the importance of competition, an unfair playing field in favour of imports will have the adverse effect of discouraging local manufacturing investments with consequent negative impact on employment and other manufacturing-linked economic activities,” she said.

Ng’ombe explained that in order to ensure that there is a level playing field on the market, the government needs to deal with smuggling by traders who do not pay taxes hence have undue advantage over local production, and crack down on apparent dumping of product from foreign players.

“As an example, cement brands coming into Malawi from Zimbabwe are sold at prices that are below the selling price in Harare. It would appear that such players are simply aiming at extracting the already scarce forex from Malawi into Zimbabwe,” she said.

Ng’ombe also said the government has to address the issue of uneven tax regimes between Malawi and its neighbours which is there in spite of belonging to the same Sadc bloc.

She explained that imports of cement into Malawi are not subject to any special tariffs but in spite of Sadcmembership, most of the neighbouring countries have placed cement on their list of sensitive products and apply special tariffs on the same to protect their local industry.

Ng’ombe said: “Malawi must look at the treatment by the different countries and, at the minimum, apply the same treatment to achieve a level ground. Failure to do this will continue discouraging Malawian exports while giving undue advantage to imports from those countries.”

She urged Malawian customers to keep up with Lafarge cement as their product of choice despite the market challenges saying the company places a heavy focus on quality to ensure that it has repeat business from its customers.

Ng’ombe said as a locally based cement manufacturer Lafarge ensures that local (MBS) and international            accreditations (ISO 9001:2015) are maintained.

She said: “Importers cannot be subjected to the same level of scrutiny and accountability as it is difficult for customers to trace what they have bought back to the manufacturer.”

“Having said this, it should be notedthat the cement industry has in Malawi brought down prices significantly in real terms over the recent years. This is in spite of major escalation of key cost items such as power and fuel and other challenges such as power rationing. We hope that lasting solutions can be found on these issues in order to allow the industry to bring down production costs and make cement more affordable.”

However, spokesperson for the Ministry of Industry and Trade, MayesoMsokera, told Mining & Trade Review in an earlier interview that government gives licences to traders to import some cement to supplement the deficit from local production.

Msokera said, “As Government, we have the mandate to balance the needs of both the producers and the consumers with regard to availability of this essential commodity as well as its price, and the current cement importation does not amount to an influx.”

He explained that it is the government’s duty to stabilize supply and prices of cement so that they do not destroy the construction industry, which also employs many people and is an integral part of Malawi’s infrastructure and industrial development as it provides a growth impetus to other sectors of the economy through backward and forward linkages.

“We have had situations where cement prices rose to around MK12000 in 2017. Therefore, it is, essential that, cement availability and affordability is safeguarded for the healthy growth of the Malawi economy,” he said.

He, however, acknowledged the fact that some cement is being smuggled into the country and said, as Government, they are considering additional measures of curbing the problem.

“The Ministry is discussing with other Government agencies such as the Malawi Revenue Authority and the private sector stakeholder institutions so that issues of smuggling are addressed holistically. As a Ministry, we would like to appeal to the private sector to hold hands and collaborate with Government in order to loot out this malpractice bedeviling our manufacturing sector,” said Msokera.

He advised local firms to extend their distribution channels to supply their cement to all angles of the country including bordering districts where traders prefer importing from neighbouring countries as a cheaper option.

Msokera assured the local industry of Government’s   support saying the Ministry is advocating for growth and development of local industries through the Buy Malawi Strategy, which encourages consumers to purchase locally produced products which are equally of good quality.

Both Shayona and CPL have invested in multibillion-kwacha construction of clinker producing plants at their factory areas in Kasungu and Mangochi respectively.

Shayona, which has a workforce of over 1200 mostly locals, has a comprehensive CSR programme which has seen the company constructing school blocks at a primary school    close to the Kasungu factory, making drug donations to government hospitals and clinics, and planting trees annually in the factory locality to assist in environmental conservation.

Though its factory is relatively new, CPL also boosts of a CSR programme that has involved donating cooking oil making machines to members of the community in the factory area, constructing school blocks and procuring a transformer to electrify the area that hosts the factory.

Shayona Cement Corporation produces cement brands of various strengths including: Akshar, Buildplast and Thanthwe while CPL’s brands include Mkope and Njati.

Lafarge Holcim Malawi, whose cement brands include Khoma, Kumanga, Duracrate and Supaset, has continued   to show commitment to Malawi with recent investments of close to MKW 1.5billion in a Soil Stabilized Blocks factory (14 Trees) in partnership with the Commonwealth Development Corporation (CDC).

The company is executing the investments in line with its ‘Kumanga Malawi’ programme which is aimed at supporting the Government and other stakeholders in developing Malawi.

Pillars in this program include sustainable building solutions, Small and Medium Enterprises support, Road and Workplace Safety, Employee empowerment and Product usage awareness/ training.

Records from the National Statistical Office indicate that in 2017 alone, imports of cement and clinker amounted to MK28.76-billion.

Dangote Cement, owned by Nigerian billionaire AlikoDangote, is Africa’s largest cement producer with a production capacity of 45.6-million tonnes per year.

Business
Foreign cement floods Malawi
February 01, 2019 / Wahard Betha

There is a growing influx of foreign brands of cement on the Malawi market, whose uncontrolled       importation has created shockwaves among local manufacturers of the product owing to stiff market competition posed by the foreign products.

Mining & Trade Review has established growing market competition between the imported cement and local cement brands mainly in the major cities of Lilongwe and Blantyre.

The foreign brands available in the shops include Ultra-Semi, PPC, Shuwa Cast and Sinoma, a product of China National Materials Company Limited Group – a Chinese multinational that has penetrated Africa by   establishing branches in a number of countries including neighbouring Tanzania and Zambia.

Malawi also continues to import Dangote Cement, produced by Nigeria’s giant Dangote Group through its subsidiaries in neighbouring countries.

Local manufacturers have described the market competition posed by the influx of the foreign brands as unfair since the imported   cement is manufactured in countries whose economic conditions are not similar to those in landlocked Malawi where cost of production is higher.

“The growing quantities of cheap imported cement on the Malawi market are a threat to the survival of local producers like Shayona, which employs a good number of Malawians and substantially contribute to government revenue through various taxes. We call on the Malawi government to regulate the industry in a way that will guarantee survival of local producers,” says Shayona Cement Corporation Operations Manager, PrajeeshPadmanabhan in a write-up he presented at the 2018 Annual General Meeting for the Malawi Chamber of Mines and Energy.

He says it is unfortunate that, though the country can sustain itself through utilization of local limestone               resources for production of cement, every year Malawi is importing clicker and cement worth billions of Kwacha.

Records from the National Statistical Office indicate that in 2017 alone, imports of cement and clinker amounted to MK28.76-billion.

Padmanabhan says: “Such a trend is not viable for Malawi which needs the foreign exchange used for          these cement imports for crucial requirements such as procurement of drugs for its hospitals.”

“It also has to be noted that the local cement industry is still in an infant stage and requires support from the government by controlling these imports. We are capable enough to supply the country’s requirements without the imports.”

Managing Director for Shayona Cement, Jitendra Patel, told Mining & Trade Review in a previous interview that it is imperative for the government to control cement imports and support local investments such as the expansion of the Shayona factory in Kasungu if the country is to achieve socio-economic development.

He said that besides providing employment to Malawians, the cement companies support the government in a number of ways including the provision of social amenities as part of corporate social responsibility (CSR) programmes.

“The government has to appreciate our role as a partner in development and protect our investments. It has to understand that by encouraging cement imports, it is exporting jobs to those cement producing countries and    this is retrogressive at this time when all the countries are fighting to retain jobs,” said Patel.

Cement Products Limited (CPL) Chairman, Aslam Gaffar, also expresses concern over the growth in cement imports saying it is high time the government appreciated massive investments by the local producers and protect them from the harsh business environment posed by imported cement.

He says cement producers are keen to continue engaging the government through the Ministry of Trade, Industry and Tourism on the issue.

“We were expected to discuss this issue with the Ministry but the meeting was aborted at the 11th hour due to the recent cabinet reshuffle. We are looking forward to their support as we are sure they are equally anxious on the amount of forex being wasted,” he says.

However, spokesperson for the Ministry of Industry and Trade, MayesoMsokera, says the government giveslicences to traders to import some cement to supplement the deficit from local production.

He explains that applications for import licenses for cement are scrutinized and granted upon making an appropriate demand and supply analysis.

Msokera says, “As Government, we have the mandate to balance the needs of both the producers and the consumers with regard to availability of this essential commodity as well as its price and the current cement importation does not amount to an influx.”

He explains that it is the government’s duty to stabilize supply and prices of cement so that they do not destroy the construction industry, which also employs many people and is an integral part of Malawi’s infrastructure and industrial development as it provides a growth impetus to other sectors of the economy through backward and forward linkages.

“We have had situations where cement prices rose to around MK12000 in 2017. Therefore, it is, essential that, cement availability and affordability is safeguarded for the healthy growth of the Malawi economy,” he says.

He, however, acknowledges the fact that some cement is being smuggled into the country and says, as Government, they are considering additional measures of curbing the problem.

“The Ministry is discussing with other Government agencies such as the Malawi Revenue Authority and the private sector stakeholder institutions so that issues of smuggling are addressed holistically. As a Ministry, we would like to appeal to the private sector to hold hands and collaborate with Government in order to root out this malpractice bedeviling our manufacturing sector,” says Msokera.

He also encourages local industries to improve their distribution network to ensure that cement is available in all corners of the country saying there are cases whereby companies undertaking large- scale construction projects in bordering districts prefer to import cement from neighboring countries as it makes economic sense due to transportation problems in sourcing the locally made product.

Msokera says Government is advocating for growth and development of local industries through the Buy Malawi Strategy, which encourages consumers to purchase locally produced products which are equally of good quality.

Coordinator for the Chamber of Mines and Energy Grain Malunga commented in an earlier interview  that in countries like Malawi where cost of production for cement is high due to environmental factors, there is need to guard against unfair competition such as “dumping” of foreign cement products.

“Profit margin for cement sales are less and there is need to have access to cheap power, high quality limestone and proximity to good markets and other raw materials which are not always readily available in Malawi,” he said.

He, therefore, advised the government to deal with the issue of cement carefully observing that the industry is very sensitive to legal and regulatory instability.

Both Shayona and CPL have invested in multibillion-kwacha construction of clinker producing plants at their factory areas in Kasungu and Mangochi respectively.

Shayona, which has a workforce of over 1200 mostly locals, has a comprehensive CSR programme which has seen the company constructing school blocks at a primary school close to the Kasungu factory, making drug donations to government hospitals and clinics, and planting trees annually in the factory locality to assist in environmental conservation.

Though its factory is relatively new, CPL also boosts of a CSR programme that has involved donating cooking oil making machines to members of the community in the factory area, constructing school blocks and procuring a transformer to electrify the area that hosts the factory.