Archives August 2023

Zim’s citrus exports seen soaring this year

ZIMBABWEAN citrus exports to China are expected to be surpassed this year after the total external trade of the fruit variety reached a value of US$33,78 million last year, up from just over US$10 million in 2021.

The prediction is based on the General Administration of Customs of China (GACC), in June, allowing 11 local citrus orchards and six citrus pack houses to export the fruit variety into China.

Fresh citrus produce to be exported includes sweet orange (citrus sinensis), mandarin orange  (citrus reticulata), grapefruit (citrus paradisi), lemon (citrus limon and  citrus aurantifolia) and sour orange (citrus aurantium).

In its second quarter newsletter, the Competition Tariff Commission (CTC) said with stability coming into play post-pandemic and sudden growth in demand, this created growth opportunities for Zimbabwean agricultural citrus farmers.

“Zimbabwean citrus exports have been increasing over the past eight years with the highest export value recorded in 2022 of US$33,781 million. Fresh or dried oranges are the main exports,” the CTC said.

“China’s import of Zimbabwean citrus produce will increase citrus exports compared to 2022. 

“The CEA facilitates citrus exporters’ access to a bigger market and market diversification opportunity reducing dependence on local markets. 

“Given that farmers are complying with GACC standards, this means investment into machinery and processes to ensure that products meet standards.”

The CTC said that improvement in local farms and orchards transforms the farming industry through innovations and adoption of new technologies.

The commission based its findings off the recorded trade figures listed on international trade tracking website, the Trade Map.

“According to Trade Map, China imported citrus fruits worth US$594 million in 2019 alone,” the CTC said. 

“China’s orange production has slightly increased over the past 3 years from 2018/19 to 2020/21, from 7 200 000 MT (metric tonnes) to 7 500 000 MT, while consumption increased from 6 989 000 MT to 7 335 000 MT.

“In the same period, there has been a drastic reduction in imports from 4 340 000 MT to 2 900 000 MT and stagnant exports of 55 000 MT. 

“Before the pandemic, China’s orange imports witnessed seven consecutive

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Citrus exports rakes in US$33,8 million

Sikhulekelani Moyo, mskhulekelani16@gmail.com

Zimbabwe’s citrus exports raked in US$33,8 million in 2022 with fresh or dried oranges singled out as the main contributors to exports receipts, the Competition Tariff s Commission (CTC) has said.

In its latest newsletter, CTC said the country’s citrus exports have been increasing over the past eight years with the highest export value of US$33, 781 million recorded last year.

“In 2021, citrus fruit production in Zimbabwe was 138,264 metric tons (MT) and has been growing at an average annual rate of 2,89 percent, according to the World Bank. It exported 57,283 MT of citrus produce to the UK, Singapore, UAE, Malaysia, Hong Kong, Netherlands, and Zambia,” said CTC.

Zimbabwe and China entered into a Citrus Export Agreement (CEA) , a development that CTC said will open new opportunities  to boost  agricultural trade.

Eleven citrus orchards and six citrus pack houses from Zimbabwe were selected to be part of the citrus exporters to China.

Fresh citrus products to be exported include sweet orange (citrus sinensis), mandarin orange (citrus reticulata ), grapefruit (citrus paradisi), lemon (citrus limon and citrus aurantifolia), and sour orange (citrus aurantium).

The commission said the agreement will bring increased demand for agricultu ral produce and improvement in the balance of trade as well as the transf ormation of the farming industry and gaining new markets.

China ‘s import of Zimbabwean citrus produce will increase citrus exports compared to 2022. The CEA facilitates citrus exporters’ access to a bigger market and market diversification opportunity reducing dependence on local markets,” they said.

Given that farmers are complying with General Administration of Customs of China (GACC) standards, this means investment into machinery and processes to ensure that products meet standards. Improvements in local farms and orchards transform the farming industry through innovations and adoption of new technologies.”

According to Trade Map, China imported citrus fruits worth US$594 million in 2019 alone.

China’s orange production has slightly increased over the past three years from 2018/19 to 2020/21, from 7 200 000 MT to 7 500 000 MT, while consumption increased from

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Zim in line to reap big from China citrus market

ZIMBABWE’S citrus producers stand to benefit from the massive Chinese market following the conclusion of the Citrus Export Agreement (CEA) with Asia’s largest economy, says the Competition and Tariff Commission (CTC).

Signed in 2015, the agreement was largely designed to secure a ready export market for citrus produce for smallholder growers under the Shashi Irrigation Scheme in Bindura.

The agreement smoothens the movement of first-order shipments from registered companies that have met stipulated compliance requirements.

Zimbabwe’s fresh and dried citrus exports reached an eight-year high of US$33,8 million in 2022, from less than US$5 million in 2015, and tapping into the Chinese market provides an excellent opportunity to further stimulate the shipments.

In 2021,citrus fruit production in Zimbabwe was 138 264 tonnes.

Of that output, Zimbabwe exported 57 283 tonnes to the United Kingdom (UK), Netherlands, Singapore, Malaysia, Hong Kong in Asia, United Arab Emirates (UAE), and Zambia.

Apart from their health benefits to human consumption, citrus products have another essential utility given their medicinal values such as in the production of insecticides, cosmetic and soap industries.

According to the World Bank, Zimbabwe’s citrus exports have been growing at an annual rate of 2,89 percent since 2015, with the highest export value recorded in 2022.

South Africa, Egypt, Australia, the United States of America (USA), and Spain with regard to the Chinese citrus market.

In 2022, South Africa topped the fresh and dried oranges suppliers list to the Chinese market deliveri ng products worth US$117,499 followed by Egypt at US$36,181, Australia (US$35,564), USA (US$30,137) while Spain supplied US$7,942.

Zimbabwe is primed to benefit immensely from the Chinese citrus fruit market if the opportunity is taken up seriously,particularly after a dip in China’s citrus imports given the unprecedented rise in freight and labor costs attributable to Covid-19 pandemic.

Although the Chinese market presents a huge opportunity for Zimbabwe’s citrus exports, the country faces stiff competition from other African markets, hence the need to invest more in enhancing quality and competitiveness of products to meet international standards.

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Almin Metal Industries acquires City Glass

ALMIN Metal Industries (Almin) has acquired three companies — RD Architectural Aluminium (AA), Lupane Timber Products (LTP) and City Glass and Paint Supplies (City Glass) —  becoming one of the biggest merger deals inked recently.

Almin is a Zimbabwean-registered company with various subsidiaries operating in the manufacturing sector and related markets.

It extrudes and powder coats various aluminium profiles, irrigation pipes and fittings and complements local production through the sale of imported aluminium accessories.

Almin has operations in Harare, Bulawayo, Mutare and Gweru.

AA, LTP and City Glass have interests in fabrication and installation of aluminium and glass windows, doors, shopfronts and building facades among others.

The parties approached the Competition and Tariff Commission (CTC) in February this year seeking approval of the deal, which has since been concluded.

 “The commission approved the merger on condition that Almin, its subsidiaries and affiliates, and its successors in title should supply other aluminium and glass fabricators with toughened and tinted glass, and offer non-discriminatory terms and conditions on glass supply that include inter-alia prices, quantity, quality and or any other,” CTC said in its second quarter report.

It said the merged operation would offer several services including fabrication processes and painting and processing of trees into timber.

CTC approves six mergers

“The aluminium market has more competitors as the barriers to entry are minimum. As an importer, entry and exit in the market is free,” it said.

“However, it is difficult as a manufacturer. The glass market has imported products as Zimbabwe does not produce glass but value adds to imported glass thus the market is highly competitive with numerous players.

“The timber market has exogenous tree plantations controlled by the Forestry Commission. It also has numerous timber product manufacturers (formal and informal), big competitors and a number of small players (40% of the market).”

The report said all the industries were extremely competitive with many formal and informal new players.

The commission classified the transaction as a conglomerate merger with vertical elements,

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Shepco acquires shares in Haggie Rand

MINING and industrial equipment manufacturing concern, Shepco Industrial Supplies (Shepco) has acquired a significant shareholding in Haggie Rand Zimbabwe (Haggie Rand) for an undisclosed amount.

The two parties approached the Competition and Tariff Commission (CTC) in March this year seeking approval of the deal, which has since been accorded.

The acquisition comes barely a year after Haggie Rand Zimbabwe parent company, the Industrial Development Corporation of South Africa, invited suitors saying it was exiting the Bulawayo-based firm.

Shepco is a business group with mining, industrial and manufacturing operations of nails, bolts and nuts, spares and maintenance for the mining industry, mining equipment (locomotives, loaders, co-pans, conveyor rollers), and distributing safety wear.

Haggie Rand produces steel wire products including wire drawing, wire rope, aluminium conductors and chains and fittings.

The commission defined the relevant market as the drawing of wire in the whole of Zimbabwe, and manufacturing and distribution of nails in the country.

Due to the customer supplier relationship between activities of the merging parties, the merger was classified as vertical. Haggie Rand is involved in wire drawing whereas Shepco is a manufacturer and distributor of wire nails.

“Competition analysis considered theories of harm affecting vertical mergers namely input and customer foreclosure,” CTC said in its second quarter report.

“Input foreclosures arise when Haggie Rand restricts access to nail wire that it would have otherwise supplied to Shepco’s competitors such as Coal Zim, Survival Fasteners, Tassburg Fasteners and other competitors outside the merger.

“Haggie Rand is producing way below its production capacity due to working capital challenges, constituting at most 1% of the market. Its current investors are unwilling to inject funding to resuscitate operations hence Haggie Rand is severely undercapitalised.”

CTC further noted: “Market power is one of the prerequisites to engage in input foreclosure.

“In this instance, Haggie Rand does not have the ability to engage in such a practice as it is a very small player.

“Moreso, 90% of locally drawn wire is imported.

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Zimbabwe records 50% increase in merger transactions

ZIMBABWE has recorded a 50% increase in merger transactions since January this year as companies expand their portfolios in response to the Second Republic’s pro-business policies.

The Competition and Tariff Commission (CTC) has revealed that the manufacturing industry is dominating the approved 12 transactions followed by the financial and insurance sector as well as agriculture, forestry and fishing.

The Commission reveals that 75% of the transactions involved Zimbabwean firms and the remaining 25% involved South African companies acquiring local entities.

CTC spokesperson Mr Tatenda Zengeni highlighted that the increase in merger transactions is driven by investors’ desire to grow businesses.

“Seven merger transactions were approved without conditions and three were approved with conditions while one transaction was prohibited and one transaction awaiting representations. There was a 50% increase in merger decisions rendered in the first half of 2023 compared to the first half of 2022. The merger disapproved had negative ramifications in the FMCG market,” said Mr Zengeni.

“Post-merger, the merged entity would acquire market power to the detriment of competitors and consumers. In cases approved with conditions, companies in upstream markets were ordered to continue providing downstream firms at nondiscriminatory terms and conditions to address issues of input foreclosure after a merger has been consummated, then in other cases approved with conditions, companies were ordered to divest as a remedy to address anti-competitive concerns such as using market power to prevent competitors from entering or expanding in a market,” he added.

Some of the transactions concluded in the first half of the year include the acquisition of Marsh Holdings by Old Mutual Zimbabwe Limited, Zimco Group Proprietary by Autox Proprietary, the purchase of Fertiva Proprietary by Kali Union as well as a joint venture involving Horncul Investments and Blackhide Investments.

There is also the purchase of majority shareholding in Danny’s Auto by a South African Company, a merger involving Almin Metal Industries and City Glass and Paint, the acquisition of a 50% stake in Shanksville Farming by Annunaki Investments and the acquisition of a 100% shareholding of Davis Granite by Takura Capital Partners, among others. – ZBC