Zambias Agro Processing Industry Current State and Challenges

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Zambias Agro Processing IndustryCurrent State
and Challenges

• Presentation at the EU TRINNEX Workshop
• Held at Pamodzi Hotel, Lusaka Zambia
• 16th 17th June 2009
• by
• Hamusimbi Coillard
• (Zambia National Farmers Union)

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Presentation will focus on

• State of ZM agro processing prior to 1991
• ZM agro processing state after liberalization
  to-date, by briefly looking at the
• Cotton Industry
• Poultry industry
• Beef and Diary industries
• Stock feed industry amongst others
• Challenges

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Prior to Liberalization

• Until 1975, Zambia was heavily dependant on
  copper
• As world copper prices fell, ZM started getting
  more involved in agriculture, resulting into
• Huge public investments in agro processing
  facilities, e.g.
• Zambia Sugar, Lintco, Dairy Board, Namboard,
  Zamhort, Cold Storage Board, etc)
• By 1980, most of agro processing parastatals were
  giving in to the pressures of globalization and
  liberalization dictates
• In 1991, ZM ushered a third Republican anchored
  on full liberalization and privatization
• To date, ZM

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Liberalization and Privatization

• Entailed replacing of services previously
  supplied by the state i.e. services such as
• marketing,
• Credit
• inputs supply, and
• agro processing
• with private sector delivered services
• We have now a NAP which focuses on promoting
  private sector led agric development

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Cotton industry

• From one parastatal Lint company, we have now 9
  ginners
• With a total ginning capacity of over 400,000MT
  (2/3 of ginners in Eastern Province)
• Against the current national production of about
  130,000MT
• By 180 190,000 small scale farmers

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Sugar industry

• One major sugar company (Zambia Sugar)
• With two upcoming sugar companies (Kafue and
  Kalungwishi (Kasama))
• Refinery capacity of /- 560,000MT
• Current annual national production of /-
  320,000MT,
• Annual production expected to rise to
  /-500,000MT with completion of Zam Sugar
  expansion project

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Beef, chickens and milk

• About 19 beef processors with processing
  capacity of about 120,000 animals/yr
• 3 major chicken processors with 13 million
  chickens/yr capacity (against annual broiler
  production of /- 26 million)
• /- 22 million liters of milk processing
  capacity/yr
• /-60,000 pigs processing capacity/yr

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Stock Feed Industry

• 7 major stock feed manufacturers
• Producing /- 130,000MT of assorted livestock
  feed per year
• Major stock feeds mainly for poultry, dairy and
  pigs
• Have also about 3 major oilseed processors
• Along the line of rail

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Maize (milling)

• 1.2million MT being the consumption of maize
• Mills grind an average of 65,000MT/month which
  translates to 780,000MT/yr
• milling capacity estimated at 100,000MT/month
• But most mills operate between 50 - 70 capacity

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Challenges

• High cost of doing business in ZM due to
• High energy costs (especially fuel)
• High inputs/raw material costs
• Taxes
• Volatile exchange rates
• Poor rural infrastructure , especially rural
  roads, which cause high transactional costs
• Limited access to affordable long term finance
• Export market restrictions (facing a shrinking,
  and increasingly sensitive and selective market)

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• Thank you