HomeBusinessWeakening rand threatens Mealie-Brand exports

Weakening rand threatens Mealie-Brand exports

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FARM implements manufacturer Mealie-Brand says exports to Zambia currently constitute 20% of total volumes, but weakening of the South African rand and devaluation of Zambian kwacha was posing a threat.

BY MTHANDAZO NYONI

Currently the US dollar and rand exchange rate is hovering at $1 to R13.

Mealie Brand is Zimplow’s key agriculture implements unit with markets throughout sub-Saharan Africa.

Managing director Walter Chigwada told NewsDay that his company exports to sub-Saharan Africa with its major markets being Zambia, Angola, South Africa, Lesotho, Namibia and Botswana.

He said the Zambian market was rich and Mealie-Brand would continue exploring further.

“Mealie-Brand is already in the Zambian market. Zambia remains our major key market and currently our exports to that country constitute 20% of our total sales as a company. In general, our exports turnover to Zambia ranges between 40% to 50% on average.

Basically, we are on the upward rebound,” said Chigwada.

“However, we have a challenge with the weakening of the South African rand against the US dollar and that is killing our competitiveness. But there is nothing much we can do at the moment because it’s a regional problem.”

He added: “What we can do is to work on ways on how we can reduce our cost of production locally and improve on our efficiency to remain competitive.”

The company also faces challenges such as brand infringements, devaluation of the kwacha, competition and climate change, he said. Chigwada said 70% of the company’s distributions were being done by informal distributors.

Recently, Chigwada revealed that in 2014, the company exported 16 400 ox-drawn ploughs to Angola and targets to export 25 000 to Angola in 2015.

He said Angola has been a market that they have been developing over time from an export of 800 ox-drawn ploughs in 2008.

The firm produces a wide range of animal-drawn implements which provide mechanisation solutions for land preparation, planting, and crop cultivation through to post harvest.

In the full year to December last year, it reported 5% growth in volumes and 11% rise in export sales.

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