How did the departure of a number of major players in the industry in 2016 affect Zambia's tobacco sector?
In 2016, Zambia Leaf and Associated Tobacco Company (ATC) left the market, and Alliance One, one of the largest merchants in the country, scaled down its operations, reducing its sponsorship of small-scale farmers. The direct impact of this was a dramatic drop in tobacco production. In 2013, we produced 45,000 metric tons, whereas in 2016 we produced somewhere in the region of 25,000 metric tons. However, as far as the TBZ is concerned, this downward trend will not continue. For instance, we already have several inquiries from some new companies interested in both production and manufacturing. There are some local manufacturing companies, such as Copper Leaf and Imperial, and we have also seen the arrival of Rose, a company that seeks to kick start small-scale farmer production, as well as assist large commercial farmers. British American Tobacco (BAT) also plans to enter the market next year, with plans to manufacture in-country, which will be a major boost to the industry.
Aside from private-sector interest, what can be done by the authorities to further stimulate the tobacco industry in Zambia?
The government's policy is to move away from copper production into agriculture as the mainstay of the economy. Tobacco is no exception, and it is clear that the industry is included in this mandate. We already see investment and commitment from the government. For instance, the government is opening up land for expansion in agriculture in each and every province. We would like to see tobacco being a part of such an arrangement. As other crops are grown in those areas, we believe tobacco should also be placed on the list of priorities
Where is the tobacco exported to?
Approximately 90-95% of Zambia's tobacco is exported. Our largest market is currently China, which means we are restricted to cultivating the style of tobacco preferred by the Chinese market. Roughly 60-70% of our crop is exported to China, and this is growing YoY. The entrance of China as a tobacco buyer in Zambia has caused great excitement among tobacco circles. Tobacco is bought from us mostly for blending, since our plants are renowned for their flavor and aroma.
How does TBZ seek investment from foreign parties?
As a country, we need more investors aside from the Chinese interest. We have had inquiries from other countries, such as Egypt. However, our aim is to attract as many investors as possible in the entire value chain: not just in cultivation or the export of raw materials, but also in production, marketing, and manufacturing as well. As a result of our successful marketing of the advantageous prospects to be found for investors in Zambia, we have seen companies such as BAT return to Zambia to start manufacturing cigarettes. Increased manufacturing will have a direct impact on tobacco production and on the growth of the economy. Currently, we only have one small processing plant in country and would like to see this change.
What do you hope to achieve in the coming 12 months?
We want to decentralize marketing so that farmers can sell their crops in the same areas in which they are based. We envision an ultra-modern tobacco flow in the southern province, and farmers in the south will not have to travel all the way up to Lusaka. By next season, they will sell their tobacco right where their farms are situated. We will launch something similar in the eastern province, updating the existing flow there and bringing it up to modern standards. We work hard to boost production in different regions of the country to reduce transport costs. That will also motivate those farmers who may be discouraged by the long distances to the market, and will therefore directly influence production.