Mugabe shocks show-goers

Bona Mugabe in black and white suite

By Daniel Chigundu

PRESIDENT Robert Mugabe shocked show-goers on Friday August 30 when he rewarded them through his company Alpha Omega Dairies for attending the 103^rd edition of Harare Agricultural Show.

Alpha Omega which is involved in the manufacturing of dairy products is a subsidiary of Mugabe’s controversial company Gushungo Dairies which a few years ago was reported to have forced Nestle Zimbabwe to buy its milk which had gone bad after failing to get customers.

Officials manning the Alpha Omega stand which was exhibiting for the second time at the show indicated that the first family had bought yoghurt and dairy juices for all the children and woman attending the show.

And to make matters more interesting the newly married Bona Mugabe helped in dishing out the free products to the jubilant recipients, who were pushing and shoving each other in long and winding queues that formed at the company’s stand opposite the Hall of Commerce.

“All children and women come and get free yoghurt and juices that amai Mugabe (first lady Grace Mugabe) has bought for you, come and get this proudly health Zimbabwean products.

“Nothing has been imported it’s all being made by Alpha Omega Dairies amai’s company come all of you there is plenty for everyone, come please stand in the queues, you will all get.

“Our mother doesn’t come to her children empty handed,” shouted one of the officials at the stand using a microphone.

The generous stunt by the octogenarian however left many people amazed because he (Mugabe) publicly disowned Bulawayo and Harare residents for showing him the middle finger in the just ended harmonized election.

Mugabe was officially opening the Harare Agricultural Show.       

Govt departments rescues Show

Traditional Doves stand at HAS

By Daniel Chigundu

GOVERNMENT departments, parastatals, tertiary institutions and a few commercial banks are the only big institutions that exhibited at the just ended Harare Agricultural Show (HAS), as other companies adopted a wait and see approach on the new government.

Last year the show was dominated by Small to Medium Enterprises (SMEs) who occupied close to 62 percent of exhibition space while big companies only accounted for 38 percent

Although Zimbabwe Agricultural Show Society (ZAS) public relations manager Heather Madombwe tried to lie in vain that there was 98 percent uptake of space this year but the situation on the ground told a different story.

Lack of interest by traditional and usually reliable exhibitors such as Doves Morgans and Chicken Inn is said to have dealt a catastrophic blow to the 103^rd edition of HAS compared to previous version were conglomerates and multinational companies would hog the limelight.

A top Harare based economist who spoke on condition of anonymity indicated that the situation was a true reflection of what is happening in the country and added that if it were not for government firms the show would have been a total disaster.

“One needs only to move around the exhibition halls to see who the biggest exhibitor is, this year. There is one hall which is only occupied by government departments, parastatals and universities but you can still see that the stands are few there compared to last year.

“The upper part of Nelson Mandela Hall has only three stands while the lower part is visibly empty, other companies have resorted to outside stands and tents which are a bit cheaper.

“The other part of the Exhibition Park resembles a ghost town but it’s not a surprise at all because that is the same situation if you visit the industries and situation is being reflected here also,” he said.

Exhibitors interviewed by this blogger expressed disappointment with the crowd that visited the show ground saying that they did not get value for money as they realized inquiries below their expectations.

Others also took a swipe at the number of days arguing that they were too many and that they are not conducive for business.

Uncertainty worries mine

By Daniel Chigundu

President Robert Mugabe

RENEWED confusion over the manner in which the Indigenisation policy is going to be implemented by the new government is causing untold headaches for mining giant New Dawn Mining Corporation, the company has indicated in its quarterly results ended June 2013.

New Dawn’s fear emanate from statements made during the just concluded harmonised polls where Zanu PF has indicated that there will be no monetary compensation for shares acquired by locals in foreign owned mining firms.

Zanu PF through its election manifesto has made it abundantly clear that it will fully indigenise the whole economy and President Mugabe has made follow-up statements that it was not mere election talk but reality.

Although there is no official communication that has been received by mining companies concerning this new arrangement New Dawn says in the wake of such developments there is no assurance that it can successfully comply.  

“Recent statements to the media by leading Zimbabwe politicians subsequent to the July 31, 2013 national elections in Zimbabwe indicate an evolving indigenisation policy that now appears to be focusing on seizing 51percent controlling interests in foreign-owned mines without monetary compensation, with the payment for such seizures to be deemed to be the value of the minerals in the ground.

“As there still continues to be substantial uncertainty surrounding the implementation of indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the indigenisation laws and regulations under commercially viable terms and conditions, or at all,” said New Dawn.

Indigenisation policy was one of the major concerns that widened the rift between political parties that formed the inclusive government with others claiming that it was anti-investor and describing it also as a self-enriching project.

The financial sector is also among the other various sectors that have been earmarked for compulsory indigenisation as soon as the new government takes office.

New Dawn said it is currently unable to predict the effect of a failure to conclude or implement a Plan of Indigenisation under terms acceptable to all stakeholders and regulatory authorities, but said such a failure could include the termination of the Company's mining licenses in Zimbabwe and the loss of ownership or control of the Company's mines or subsidiaries in Zimbabwe without monetary compensation.

New Dawn might close?

By Daniel Chigundu

Mine workers face trouble times

TORONTO listed mining giant with subsidiaries in Zimbabwe, New Dawn Mining has indicated that it might consider shutting down if operating situation does not improve.

Mining is one of the few viable sectors that have been making significant contribution to the country’s coffers since dollarisation in 2009 and closure of New Dawn mines could pose some serious challenges for the new government.

In its quarterly review ended June 30, 2013 the company said its operations in the country are being weighed down by various issues chiefly the continuous falling of gold prices, regulatory framework and operational liquidity constraints.

“With the Company under serious pressure to bring operating costs in line with the current gold price regime, combined with its challenging working capital position and the increasingly difficult regulatory and economic environment in Zimbabwe, and the heightened uncertainty surrounding the implementation of indigenisation policy subsequent to the July 31, 2013 national elections, there is a significant risk that actions more severe than steps taken so far or currently envisaged may be required.

 “If the world price of gold continues to decline further and/or the Company's operational liquidity is further strained, the Company may be forced to consider shutting down some or all of its mining operations in Zimbabwe, either temporarily or permanently, and/or the liquidation of the Company and its assets in formal or informal arrangement,” said the company.

New Dawn’s overall liquidity deteriorated during the quarter ended June 30, 2013 as a result of the falling gold price and the elevated operating costs but it has recently taken several steps to meet its liquidity obligations and is also considering additional steps, depending on the impact of recent initiatives to improve production and reduce costs on operations and cash flows.

As part of this process, the company is working with its suppliers among them power utility Zesa to ensure there will be no termination of power services where Dalny Mine is said to be the most at risk.

 The company conducted a review of the status of the exploration and evaluation of its assets which resulted in a program to sell some of its mining assets that are not considered integral to its long-term strategy.

And it is also continuing attempts to raise additional capital through financing via debt and/or equity issuances and as part of this divestiture process, New Dawn is engaging with several potential parties in an attempt to sell the Old Nic Mine and the Venice Mine.

The gold producer said its efforts to address and improve operating viability at its mine sites in Zimbabwe are subject to various factors outside of its control as it includes taxes and royalties, mining fees, labour rates, power costs, environmental regulations, economic and business environment any of which could impact the company’s operations, capital requirements and ability to operate in a commercially viable manner or at all.

Zim goes to vote

By Daniel Chigundu 

ZIMBABWEANS will on July 31 throng the 9735 polling stations dotted around the country to vote for a party that will carry their future.

The vote comes at a time when the economy has plateaued due to fierce infighting centered on political parties that formed the inclusive government.

Immediately after the formation of the inclusive government, which was brokered by former South Africa president Thabo Mbeki in 2009, Zimbabwe embarked on a growth trajectory, an antithesis of the hyperinflation of the prior year.

A couple of jobs were created in the manufacturing sector and capacity utilisation rose from between zero and 10 percent to 37.5 percent while basic goods and services also returned on the country’s supermarket shelves.

Fuel queues that had become the order of the day since December 1999, became a thing of the past, and for once, Zimbabweans begged the political leaders to subvert democracy and defer polls even up to 2018 so that they enjoy the benefits of the inclusive government for some time.

However, when tensions began to rise in the inclusive government, the operating environment was adversely affected and business appealed to authorities to hold polls so as to liberate the economy from a politics induced “hostage”.

While most citizens distanced themselves from the call for polls, they were stampeded into one by the Constitutional Court judgment in favour of a “concerned citizen” Jealous Mawarire.

President Mugabe then revoked in presidential powers and proclaimed a July 31 election date, which was also challenged at a Sadc Summit in Maputo, Mozambique.

Notwithstanding the call by the Sadc Summit to defer the election by at least two weeks, the Constitutional Court upheld its earlier decision to have polls on July 31, setting the stage for a bruising 30 days of political campaigning to win the electorate.

After all the campaigning, which saw the two major political parties attracting record crowds at their rallies around the country, it’s now judgment time.

Celebrated rivals President Mugabe and Prime Minister Morgan Tsvangirai have described the agreement (GPA) as a “beast” that failed to work during its life resulting in “massive poverty” in the country.

Any election around the world is about promises and this one is no different.

Zanu PF, MDC-T and MDC-N have crisscrossed the country, selling their promises to the electorate.

Apostolic Sects have also hosted some high ranking government delegations at their various shrines ahead of this crucial poll.

Zanu PF, through its manifesto and provincial rallies addressed by President Mugabe, has promised to fully indigenise the economy and make Zimbabweans company owners not workers.

“Indigenise, empower, develop and create empowerment. “Now we know that we are here, just as labourers, but we are in fact owners.

“FDI (foreign direct investment) and multilateral support will complement our home grown solutions,” reads the Zanu PF manifesto.

On the other hand, Prime Minister Morgan Tsvangirai’s MDC-T says it recognises the importance of re-establishing a trustworthy, effective, and accountable government.

The party says it will initiate a series of policy actions designed to jumpstart its economic plan and government service provision.

“These critical first actions will establish a foundation on which our complete agenda will be launched. “Successfully implementing this plan will bring rapid, measureable results and quickly demonstrate our ability to respond to the immediate needs of the people.

“Within the first 100 days of office, President Morgan Tsvangirai and the MDC will enact key policy objectives,” reads part of the party’s manifesto.

Having already promised 2 million jobs through the party’s policy document dubbed Juice, the MDC-T hopes to re-engage the international financing institutions for lines of credit.

The party also promises to review laws so as to increase the ease of doing business, initiate steps to deal with external debt overhang, establish a transparent revenue collection from minerals, initiate a land audit, create a sovereign wealth fund and initiate a program to return skilled Zimbabweans from the Diaspora.

SMEs appeal for markets

By Daniel Chigundu

Some of the braai stands being made by SMEs

MICRO, Small to Medium Enterprises (MSMEs) who account for close to six million jobs in the country say the biggest setback in their various businesses is the issue of markets.

Zimbabwe is said to have about four million small business but they are all struggling to establish meaningful markets for their products owing to various challenges chief among them the cruel competition from imports.

The mushrooming of SMEs in various sectors of the economy are a direct result of company closures that swept across the country in the last decade due to bad economic policies by government. 

In an interview with this paper recently Moushtec managing director Philip Zengeya, an SME involved in metal and sheet fabrication said their attempt to tap into regional markets was being hampered by lack of knowledge and resources.

“We would very much want to export our products to the region but we do not have the required knowledge and capacity to do it for ourselves and even locally its equally difficult for example just advertising in the media is expensive and way beyond our reach.

“Those that have seen our products are satisfied by our work because we do not compromise on quality and we are confident that our products can compete at any stage so based on these facts we are soldiering on despite the many challenges,” he said. 

Zengeya called on government to quickly resolve the sticking issues that have resulted in delays to resuscitate the country’s giant steel producer ZISCO Steel.

He said delays at ZISCO have left players in the steel fabrication sector at the mercy of unscrupulous importers of raw materials who charge high prices.

Addressing a panel discussion at the official launch of the FinScope MSME Survey Zimbabwe 2012 author David Chiweza took a swipe at importers arguing that they were killing the little manufactures and went on to call government to establish local market for SMEs.

“I believe SMEs need to be given markets, local markets before they go outside because money is in the markets.

“They are living in the same kraal as lion and goats were every morning you find that a goat is eaten. Manufacturing SMEs are living in the same market with importers and everyday they are being killed when all what is needed is complimenting each other.

“The ideal situation is were some manufacture while others sell but that can only happen through creating markets,” said Chiweza.

High demand for Chibuku Super

By Daniel Chigundu

Delta business executive Mark Mudimbu

THE country’s leading beverages manufacturer Delta Corporation has revealed that the newly introduced Chibuku Super has proved to be popular with patrons across the country.

Chibuku Super which is brewed in the same way as the standard Chibuku but is fermented longer to a consistent alcohol level is said to be smoother, has a consistent quality and taste and has a longer shelf life of 21 days.

In an interview with The Business Connect on the sidelines of Chibuku Super Brewery Plant tour in Chitungwiza a few weeks ago Delta Beverages Technical Services manufacturing development manager Brian Karemba said they are failing to keep the product in stock.

“We are excited by the level of demand that we have seen ever since the introduction of this product to the extent that we are not even stocking anything as trucks will already be waiting to deliver to the customers.

“After packaging Chibuku Super it is only taken into a warehouse as a formality for accountability purposes but it is not staying there for more than 10 minutes and as you can see the warehouse is empty and trucks over there are actually for the product and such has been the demand since we started,” said Karemba.

Delta said they specifically invested in new equipment that has new technology to produce the desired results of the product. The fully automated equipment bought from Delta’s traditional supplier of beverages bottling plants Krones of Germany gobbled in access of US$6.5million while further investments were sunk in training and development of people to run the operations.

Speaking at the same occasion company’s business executive Mark Mudimbu added that results from the sales indicate that the investment has paid off and that more investment was necessary in the near future.

“The investment has paid off because of the high and enthusiastic acceptance of the product. We have been operating roughly for three months and the plant is contributing significantly to the volumes of the business so much that we are looking at further investment to increase production.

“The product is currently being distributed in specific urban markets and will be rolled out to other centres as further investments are made to production capacity,” said Mudimbu.

The Zimbabwe Stock Exchange listed company said they are cognizant of the environmental problems emanating from PET bottle hence they are part of a joint venture in waste recycling company called PetrecoZim which will among other things recycle PET.

People have also been urged to use the PET containers as water receptacles at homes due to persistent water blues from Harare Water