BEEFING UP
TBY talks to Carl Irwin, Joint Founder & CEO of Zambeef, on the new wave of investments that will come with the business' new partner and leveraging local capacity to satisfy the region's demand.
BIOGRAPHY
Carl Irwin is Joint Founder & CEO of Zambeef. Irwin graduated with a bachelor of commence from the University of Cape Town and is a Fellow of the Zambia Institute of Chartered Accountants and the Institute of the Chartered Accountants of England and Wales. He is also a shareholder and director of a number of other companies covering tourism, agriculture, and aviation, including Zambia’s domestic scheduled airline Proflight Zambia.What were Zambeef's priorities in 2016?
In 2016, we focused on building on our core strengths and growing areas that we believe we are best in class. These include our retail and distribution activities, and the cold-chain food production that feeds into our retailing network. We also saw our wheat farming operation flourishing with yields as good as anywhere else on the continent. 2016 also saw a restructuring for Zambeef. We ended our relationship with Rainbow, taking full control of all our chicken operations, including our hatchery business and second stockfeed operation. We also took steps to de-risk the business and strengthen the balance sheet, by bringing a new partner into the business, the CDC Group Plc, which has a long and rich history in Zambia in terms of developmental projects. Many companies developed by CDC remain pillars of the Zambian economy. These include Kariba Dam, Chilanga Cement (now Lafarge), and Zambia Sugar. We ended 2016 with a strong balance sheet and in a strong financial position.
Where will the funding from this partnership with CDC be channeled?
The CDC funding allowed Zambeef to take full control over its chicken operations again, including our hatchery, broiler operation, and the new stockfeed plant. Careful planning has gone into the capital expenditure budget for 2017. The first area is our retail operations, in which we have budgeted to invest USD3.2 million this year in the continued aggressive expansion of our retail network, which is the engine room that drives Zambeef. In order to ensure the increased business from this retail expansion results in incremental business, investment will be made into the supply side of the business. The dairy division will have USD1.5 million investment, which includes the expansion of the milk processing plant as well as a new rotary parlor at the Zambeef Kalundu Dairy farm, which will enable our dairy operation to expand from milking 1,000 cows a day to 3,000 over the next few years. In 2016, we hit capacity at the Novatek stockfeed plant, producing around 15,000 tons of stockfeed per month. In total in 2016 we produced a total of 150,000 tons of stockfeed and we are the market leaders in this area. We are looking to expand within Zambia and the wider SADC/COMESA region. We will be bringing a second stockfeed plant on line in April 2017, which will require USD2.8 million of capital expenditure in the current financial year to complete. The new plant will have capacity for another 12,000 tons per month, and will almost double our stockfeed capacity. The next large capital expenditure will be USD1.7 million in expanding our chicken hatchery business. By 2Q2017, we will see increases from 250,000 day-old chicks a week to 350,000. Additional capital will be spent on expanding our pork and chicken processing operations as well.
What advice would you give to other companies about creating a viable agribusiness model for the Zambian market?
Long term it is important to think about being competitive in the wider SADC/COMESA region. A company needs to be efficient; it needs to know where it will sell its goods and secure its market and its supply. For Zambeef, it is the strength of our retail network in Zambia that has given us a platform to widen our market into the SADC/COMESA region. Zambia is largely self-sufficient in food, so if we are to grow the agricultural sector we need champions of the sector to be taking products into the wider region. Moving from our 15 million population base to serve the region's 450 million people will be the next driver of the sector. We are fortunate to have a pro-agriculture government. For example, the tax rate for agribusiness is 10% instead of the usual 35%, which is a huge incentive to invest in agriculture in Zambia. The government is also enthusiastic about encouraging agri-processing and is very supportive of the agriculture sector as a whole.
BEEFING UP
TABLE OF CONTENTS
Year In Review
What A Year
Zambia has long been a bastion of stability in Southern Africa, and while its economy has been rocked in recent years by the falling value of copper prices, a devaluating kwacha, and high inflation, through the Economic Recovery Program the government has bold ambitions to right the ship.
read articleReview
Convoke, Confound & Collect
Squeezed between a rock and a rather hard place by the slowdown in Chinese demand for copper, by far Zambia's biggest export and government-revenue generator, President Lungu has been forced to get creative in his country's alliances to broaden revenue streams and lessen its dependence on the vagaries of one foreign market.
read articleGuest Speaker
Dr. Stergomena L. Tax, Executive Secretary, Southern African Development Community (SADC)
TBY talks to Dr. Stergomena L. Tax, Executive Secretary of the Southern African Development Community (SADC), on regional economic development, boosting pan-continental free trade agreements, and improving security through mutual development.
read articleInterview
Susan Sikaneta, Ambassador, Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa
TBY talks to Susan Sikaneta, Ambassador of Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa, on championing peace across the continent, advancing women's rights, and promoting Pan-Africanism.
read articleInterview
Sebastian C. Kopulande, CEO, Zambian International Trade & Investment Centre (ZITIC)
TBY talks to Sebastian C. Kopulande, CEO of Zambian International Trade & Investment Centre (ZITIC), on taming austerity, stimulating sustainable growth, and creating the framework to support entrepreneurship
read articleFocus: Zambia Plus
Adding it All Up
On October 20, 2016, at the 2017 Budget Address, Finance Minister Felix Mutati launched the government's economic recovery program, christened "Zambia Plus." The program is designed to spur domestic productivity, through strengthening ties and collaborating with external donors and developers.
read articleReview: Banking
Macroeconomics Rule the Roost
In its ongoing efforts to diversify away from one principal commodity, copper, the government fosters the development, standardization, and efficacy of the private sector. In doing so the systematic support of the financial universe, especially banks, is vital, as is the goal of financial inclusion.
read articleFocus: SME Growth
IMF support program
An IMF support program stands to provide Zambia with some much-needed discipline on its expenditure and operational efficiencies; however, many caution the need for Zambia to determine what it wants to achieve and how the program will benefit the country.
read articleInterview
Christabel M. Banda, Executive Director, Insurers Association of Zambia (IAZ)
TBY talks to Christabel M. Banda, Executive Director of Insurers Association of Zambia (IAZ), on the evolution of the local insurance landscape, raising awareness, and tackling challenges in the sector.
read articleFocus: Solar
Sunny Side Up
As power demand continues to rise and power production continues to fall behind, it's the same old story for Zambia, still wrestling with an ongoing energy crisis. Public- and private-sector drives are seeking to mitigate this deficit by activating the country's solar industry.
read articleInterview
Margaret K. Chalwe-Mudenda, Director General, Zambia Information and Communications Technology Authority (ZICTA)
TBY talks to Margaret K. Chalwe-Mudenda, Director General of Zambia Information and Communications Technology Authority (ZICTA), on new projects, the ZNDC, and expectations for the year ahead.
read articleInterview
Hon. Dora Siliya, Minister, Agriculture
TBY talks to Hon. Dora Siliya, Minister of Agriculture, on the investments being made in agriculture to enable agricultural households, diversifying Zambia's basket of produce, and making international markets more accessible for local producers.
read articleInterview
Hon. Charles R. Banda, Minister, Tourism and Arts
TBY talks to Hon. Charles R. Banda, Minister of Tourism and Arts, on the wealth of tourism destinations within Zambia, efforts to bring more visitors to the country, and what the Tourism Development Fund will contribute to developments.
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