NEW KID ON THE BLOCK
TBY talks to Desmond Maharaj, Country Head & CEO of Dangote Industries (Z) Ltd, on the opportunities in the market, its advances in transport, and plans for the company.
BIOGRAPHY
Desmond Maharaj studied accounting and finance in Johannesburg. He has worked for various organizations including PwC, Eskom, and Lafarge. Currently he serves as Country Head & CEO for Dangote Zambia.Desmond Maharaj studied accounting and finance in Johannesburg. He has worked for various organizations including PwC, Eskom, and Lafarge. Currently he serves as Country Head & CEO for Dangote Zambia.How has Dangote Industries fared in the Zambian market?
We began our Zambian operations in July 2015, with Aliko Dangote and the President of Zambia His Excellency Edgar Chagwa Lungu officially opening the company in August 4, 2015. With the currency depreciating, the copper price dipping, and the market shrinking, it was not the easiest time to launch operations. However, in spite of these setbacks, the Dangote brand was well accepted in the country. Our arrival was hotly anticipated, owing to increased demand in the cement business and certain supply deficits that led to upticks in prices and delayed construction of roads and houses. With Dangote's entrance, prices have come down and stabilized. Stability was vital, as it afforded people the opportunity to plan longer-term projects more accurately.
What opportunities does Zambia present for Dangote, and how have you tailored your products to meet these?
When we entered the market, we did so with two types of products: Dangote 3X, our standard 42.5R product that can be found everywhere we operate, and a 32.5R product. In 2017, we then added a 32.5N product, looking to serve the growing demand in the road and home construction segments. Zambia also presents us with another key opportunity, which is the potential for export, with its eight bordering countries, many of which are not yet self-sufficient in terms of in-house cement production. Secondly, cement prices in these neighboring countries are higher, which means that, even with transport costs, our prices are competitive. The problems we face include instability in terms of legislation, for example, in countries like the DRC, as well as competition from well-established brands.
What is the current capacity of the plant?
The capacity of our plant is 1.5 million tons. We are currently operating below that, due to dampened supply following the recession and the rainy season. At peak months, however, we reach 80-90% of our capacity. Looking at the market we see that the overall cement production capacity in the country stands at 3.4 million tons, and we estimate that market demand in the country is about 1.5 million tons. Further capacity expansion will be driven by increased demand from the local market.
What advances have you made in transport?
We are working hard to ensure the utmost safety precautions are being taken in our transport division. We have put tracking systems in place, hired more trainers, and have seen a significant improvement in our drivers' behavior. At the same time, the road infrastructure of Zambia is difficult to negotiate and the building of new roads connecting parts of the country will surely increase commerce. The government is considering introducing a statutory instrument for heavy goods, forcing companies to move 35% of certain heavy cargo onto rail. This is an extremely sensible initiative in terms of protecting road infrastructure from continuous damage; however, Zambia currently lacks the rail infrastructure for the 35% target to be achievable. The government should start with 5% and then slowly increase this, eventually reaching the 35% target as the rail infrastructure and rail efficiency improves.
What are Dangote's ambitions in Zambia for the medium term?
We want to make our debut in the bulk market here, where currently we have a low profile, and are securing investments in order to effectively participate in this segment. We already have the product—our cement services high-end construction such as dams, airports and so on—although currently we only supply in limited quantities. In the medium term, though, our focus will be on market penetration. We still need to raise awareness about our presence and familiarize customers with our products. There is some user education required, which will be another of our key areas of concentration which also extends into learning and development and skills transfer of Dangote employees and partners. Finally, we want to use Zambia as a starting point to explore other areas in the region, such as Malawi and the DRC.
NEW KID ON THE BLOCK
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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