eBusiness Weekly
Clifford Sambare
The issue of raw materials is topical among industrialists and even the general public in Zimbabwe these days. As a result, through this article, I have decided to look more closely into the matter.
In order to make it possible to understand what we are talking about here — as in most of my articles in this newspaper — I want to start by defining what is meant by the term “raw”, and doing so without reference to a dictionary since I believe the former approach will tend to make the issue theoretical, thereby distancing it from the practical business person and the layman alike.
Generally speaking, the term “raw” refers to the state of something either material or non material. In the metaphorical sense, “raw talent” and “raw deal” are familiar terms. However, in our case materiality is the basis of our description. In that case, the term refers to several states of matter-that is, “not yet ripe”, “not yet tempered with”, “not yet ready for consumption or use”. But paradoxically, in manufacturing parlance, it means “ready for use”. In that case, the term refers to those materials that are used in the manufacturing process £ otherwise also referred to as inputs to that process.
However, the term is also used considerably by accountants in their financial analyses and reports because most of these reports will be on manufacturing companies that always use raw materials in the manufacturing process.
And it is not an exaggeration to posit that most of us who know (about) this term first meet it in elementary accounting books and lessons but not in actual practice. The reason for this state of affairs is that so far, the majority of (us) Africans have not been exposed to manufacturing work as managers and entrepreneurs — those for whom this term is in daily usage. We usually only come across it at college and at the marketing stage — at work or in life, generally.
In a manufacturing sense, any material item or input into the manufacturing process, is regarded as a “raw material”. The manufacturing activity itself, is a form of value addition (process), so in nearly all such cases, the term tends to be contextual because in practice, there are quite a few stages at which one can start such a process, along a given value chain. In such situations, one’s finished product can easily become the next’s raw material along that value chain. In practice some value chains are short while others are long.
For example, when making furniture or paper, one first uses the tree or log as the raw material, then the timber, then the actual furniture. In the case of paper, the tree is first ground into pulp, then paper. To both the saw miller and the pulp maker, the log is the raw material. To the carpenter and the cabinet maker, the sawn timber is the raw material.
At this juncture, I want to take a rather unorthodox approach to this issue. Using my experience and information gathered from my desk research on the matter, I have to say I have come to one conclusion specifically that, as far as the current situation in Zimbabwe is concerned, this matter needs more scrutiny, as well as more research and dialogue among all the stakeholders.
I say this because I have found that there are possibly, some misunderstandings regarding this matter of “raw materials”. We Zimbabweans are known to be quite creative when it comes to language and expression.
I get this uneasy feeling that these attitudes and their concomitant actions (or lack thereof) on our part, will have had and still are, having a negative effect on the economy. Through them, we seem to be avoiding facing our challenges head on, and consequently taking action to solve same — especially where manufacturing matters are concerned. So could this term be being misused and abused by some of us, I wonder?
At this stage allow me continue to look critically into the matter so that perhaps, we can come to that stage where we can redirect our course of action as far as this issue is concerned; for this is the reason for writing these opinion pieces anyway!.
Let us start by looking at vegetable oil, dairy products and juices, which are products that some companies are importing and referring to as “raw materials”. Then there are cases in the agricultural equipment manufacturing and the energy sector, where the so called “locally manufactured” products contain only 10 percent of local content, the remaining 90 percent being imported components — that is, the same “raw materials”.
On the other hand, there are products that used to be manufactured matter-of-factly, by the RF regime with locally available raw materials but nearly all of them are now being imported as “raw materials”. Stock feed and brewing ingredients fall into this category. However, with a different mindset, a little effort and very little, or no foreign currency, we could produce these products locally again.
Thirdly, some of these raw materials, though genuinely in short supply, do not need the US dollar — the currency deemed by the industrialist to be the most critical — to be imported.
The importation of such materials requires the rand, the metical and the pula since they can be imported from South Africa or Botswana or even Mozambique.
And we are not as desperate for these currencies as we are for the former. Tansul clay and potash (for beer filtration and pH correction respectively) and table salt (for both human food and stock feed manufacturing) are such examples in this case.
But whatever the case may be, there is still need to address the issue for purposes of finding short term, medium term, and long term solutions to this challenge. In that case, let us divide our raw materials into these three categories.
For those we can restart to make, such as mono-calcium phosphate and limestone flour for stock feed among others — let us begin to do so immediately. For those needing a medium term approach such as vitamins, crops like soya and wheat (for flour), among others — let us continue to import while preparing for long term solutions. The same approach should be adopted for the third category.
As far as the first category is concerned, the issue of the pharmaceutical company CAPS, needs to be resolved immediately. From my own present knowledge of this issue-it is a typical example of incompetence among the authorities in key positions in this country, particularly those in finance!
As a result, the CAPS debacle whose source is an unresolved debt matter is one of the sources of our current challenges regarding inflation, the US dollar shortage, and most importantly, an increased mortality rate in the country due to the inaccessibility of essential drugs!
I am sure it will be easier to find the US$4 million or so that is required to expunge this debt than to be in such a nasty situation as we now are. This is assuming of course, that this is the actual problem here. For in Zimbabwe it is possible to be being misled by someone here!
In its heydays CAPS, the largest pharmaceutical company in the country, used to supply 75 percent of the country’s drug supplies. How it managed to obtain its raw materials in such a high technology industry, even under UDI sanctions, is a true miracle, but it did all the same!
The long term solutions should encompass partnerships with willing countries where our people — those with the right aptitude — should be sent out for training or the partner comes in with capital and skills to train them locally. I know this is already happening in the case of diamond polishing and cutting but the pace could be increased and more projects added to this strategy.
Still for those cases needing long term solutions, we need technology transfer, particularly for making the equipment for same, because it is high time we thought of producing locally, some machines as a starting point.
In this case, I have in mind such simple machines as diamond cutting machines, soap making machines, potato chip making machines, canning machines, baker’s machinery, and so forth. In this respect, I know that the Kwekwe Polyechnical College is working on some ore conveyors, maize shellers, and so forth. These should now be commercialised without delay.
Sadly, however, in this respect, I have observed that there seems to be a gap between the innovators and the industrialists in Zimbabwe so far. The latter seem to be conservative and unwilling to try even relatively simple tools and equipment from local individual innovators and inventors. (Maxwell Sungulani’s case is a poignant example here).
But during the Rhodesian era the industrialists were quite bold and innovative; as a result, they innovated, even invented without much ado, some simple and in some cases advanced tools.
Examples here are the Mushandi tractor, the Chongololo and Modrho tobacco curers, the Berbat cattle scale, the mini railway locomotive by Prof Engineering company, the electric motor by Borman Electrical Company, the knapsack sprayer by Sprayquip, among other machinery and tools. Bain Farm Equipment used to, and still does, make agricultural equipment such as ploughs, rollers, discs and potato diggers; and Brown Engineering makes boilers, bowsers, tobacco balers and clips, among other pieces of equipment.
At the end of the day, Zimbabweans need to go in this direction. There is no way we can continue to pine, hoping that somehow, the solution to our challenges in this case, will just come from someone else such as our traditional funders who seem to be setting impossible conditions for us.
And it’s not just about the money as some of us seem to think. In this respect, consider the Japanese case at end of the seventeenth century when they went West on a technology acquisition mission, the Iwakura Mission, to the West in 1890. When they went back to Japan they founded the Bank of Japan, printed the money and used it to restart their economy.
In that case, they bolstered the economic system through the state controlled companies in the textile, motor and ship building industries. Remember the zaibatsu and nihonjinren?
On considering the matter from a more critical perspective, one comes to realise that we are not being balanced in the way we look at this raw material issue. If we were, we would easily realise that to date, we have actually, been one of the biggest suppliers of some of the most sought after raw materials in the world, to the factories of the developed economies for a long time, and now also, to those of the emerging ones — materials such as uncut and unpolished diamonds, chrome and platinum.
In some cases, not much, except machinery is required; and in some cases still — very simple machinery at that! In this respect, consider that the Chinese are producing bricks and tiles as well as steel products from locally available raw materials. In doing this, they just need raw earth for tiles and bricks, and scrap metal for steel and iron products. In fact, the very reason why they are in this country is to be near those raw materials.
As a result, they are already making products and exporting them all over the world, right in our very own sight while we work for them, or just watch in amazement, sometimes complaining that they are treating us coarsely in the work place!
One day I was surprised to hear a Chinese industrialist on TV, saying that they have found the best clay for making tiles in remote Chakari of all places! They already know where to find the best raw materials for their factories in our country — raw materials we have been sitting on without being aware of their commercial value for quite a long time. And the quality of those tiles is simply outstanding!
To a lot of us, all this talk of making our own machinery may sound like day dreaming, but as they say, most of those success stories we see, hear or read about in the history books as well as newspapers — started with dreaming on the part of their owners. The trouble with us is that most of us have been wired to think that without Western funding, we cannot achieve much. But then, think of the Chinese approach in this respect, and the story of BRICS — a development bank that even some of the Western economic powerhouses have joined quietly.
Moreover, with the right mindset, we can find some way to collect all that money being thrown around, buying trinkets and for consumption, put it into some promising SMEs to start new businesses or to beef up the old ones, in all areas of economic endeavour — that is, food processing, machine and tool making and engineering, setting up safe small-scale mining practices, and so forth.
Clifford Sambare is an agriculturalist cum economist and is reachable 0774 4960937.
