Zimbabwe's old brands struggle to make a come-back
Built and developed over years, old-time brands for products ranging from detergents to processed foods are nowhere on the flooded supermarket shelves, now teeming with South African products, from detergents to processed foods and drinks.
“It's a South African economy, this!” says Jerry Muronda, a manager with a Harare retail outlet. “Local producers can't compete with the cheap and more developed products from South Africa. They need recapitalising.”
At the height of the crisis, Zimbabwe firms removed their products from the market after they were targeted by price controls. Foreign products filled the vacuum left by the disappearing local brands. The situation turned worse as the crisis deteriorated, hitting margins and forcing companies to scale down operations or close. Others, like Johnson & Johnson, relocated to South Africa.
Retail giant, Innscor Africa's chairman, DLL Morgan, says margins on the group's manufacturing businesses are now under severe pressure from imported products.
This, he says, requires “specific attention, and where necessary capital investment into plant and equipment” to withstand competition imposed by the imports.
National Foods, which has reintroduced limited products under its Red Seal brand, said it has closed one of its oil plants. Todd Moyo, the chairman, says the closure was “due to high cost of raw materials which has made our product uncompetitive against imported product”.
An operations manager with one food processor says “we have not come to a point yet where we can say the South African products have upstaged local ones”, but warned that without significant re-investments in plant and machinery, local products will hardly make it on the competitive local market.
While the bigger players are mulling huge technological investments to improve efficiencies and compete with South African products, other players are beginning to cry foul, alleging the duty free import regime meant to cushion struggling consumers has hurt local industries.
“(This) has been done with reckless abandon, disregarding national interest, particularly the need to protect local industry,” says Tafadzwa Musarara, chairman of the Grain Millers Association of Zimbabwe (GMAZ).
“The milling industry has been brought to its knees as we are competing with cheaply manufactured products,” Musarira says, calling for punitive duty on imports.
While imported mealie-meal was made from genetically modified organisms (GMO), local industries were barred from using GMOs, forcing them to import organic grain “which has a huge premium cost”, says Musarara.
