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Agri-Business Sector Zimbabwe

The Agri-Business Sector in Zimbabwe 2020

Alex Conradie | Zimbabwe | 30 March 2020

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Report Coverage

This report focuses on the Agri-Business Sector in Zimbabwe. It provides comprehensive information on the state of the industry, available production and trade statistics and the factors that influence the sector. There are profiles of 20 companies including Starafrica, which produces around 80% of the country’s refined sugar output, and Zimbabwe Stock Exchange-listed agro-industrial company Ariston and Rift Valley Corporation, the largest producer of bananas in the country. Other major companies profiled include National Foods and Pure Oil.

Introduction

The agriculture, forestry and fishing sectors contributed 12.1% to Zimbabwe’s gross domestic product (GDP) in 2018, and had a gross value added of US$3.7bn, according to World Bank data. Apart from its importance to the economy, agriculture is also the most important sector from a socio-economic point of view, since it employed 5.3 million people, or 67.2% of the labour force, in 2018, according to the International Labour Organisation (ILO). The ministry of Finance and Economic Development forecasts Zimbabwe's economy will shrink by 6.5% in 2019, largely due to a 15.7% contraction of the agricultural sector. Some of the challenges facing Zimbabwe’s agri-business sector are the increased occurrence and severity of climate shocks, its dependence on a rain-fed farming system, a shortage of foreign currency, rapidly rising inflation, and a scarcity of fuel and electricity.

Strengths

• Established agro-processing capacity.
• Support for the sector from the government and international donor agencies.
• The country’s Arabica coffee is sought-after.
• Zimbabwe has an ideal climate and fertile soils for the cultivation of various crops.
• Zimbabwe is a globally competitive sugar producer.
• Zimbabwe is the fifth-largest producer of flue-cured tobacco in the world, and was the fourth-largest exporter of tobacco in terms of value in 2018.

Weaknesses

• Dependence on a rain-fed farming system.
• High post-harvest losses.
• Inadequate access to finance and market information.
• Inadequate production levels of oilseeds to satisfy the country’s demand.
• Lack of agricultural equipment.
• Lack of investment in the sector.
• Lack of irrigation infrastructure.
• Most smallholder farmers cannot afford production inputs like improved seed, fertiliser and pesticides.
• Too much underutilised land.

Opportunities

• Nespresso’s rising demand for Zimbabwean coffee.
• The government’s provision of farming inputs.
• The Grain Millers’ Association of Zimbabwe’s introduction of contract farming for wheat.

Threats

• Fuel shortages and frequent electricity outages.
• Increasing competition from imports.
• Increasing production costs.
• Poor transport infrastructure leads to high transportation costs.
• Rapidly rising inflation.
• Shortage of foreign currency.
• The increased occurrence and severity of climate shocks.

Outlook

The ministry of Finance and Economic Development forecast in its 2019 Mid-Year Budget Review and Supplementary Budget that the gross domestic product of Zimbabwe’s agricultural sector will decrease by 15.7% in 2019, while the United States Department of Agriculture expects the production of sugar to increase, and the output of cotton lint, maize, millet, sorghum, wheat, groundnuts and soya beans to decrease in 2019. The production of barley was forecast to remain constant from the previous season. Tongaat Hulett expected sugar output to increase to 460,000t in 2019, as the availability of enough water for irrigation should lead to higher sugar cane production. Coffee output was expected to increase to 500t in 2019, while the government expected the production of tea and sunflower seed to also increase in 2019. The Famine Early Warning Systems Network expected the 2019/20 rainfall season to start late and be erratic, leading to below-average cumulative rainfall, and consequently lower output of most agricultural products.

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The Agri-Business Sector in Zimbabwe
The Agri-Business Sector in Zimbabwe 2020

Full Report

R 1 900.00(ZAR) estimated $104.58 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.21 (USD)*

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
2.1. Geographic Position 3
3. DESCRIPTION OF THE INDUSTRY 5
3.1. Industry Value Chain 9
4. SIZE OF THE INDUSTRY 15
5. STATE OF THE INDUSTRY 16
5.1. Local 16
5.1.1. Trade 26
5.1.2. Corporate Actions 29
5.1.3. Regulations 30
5.2. Continental 31
5.3. International 32
6. INFLUENCING FACTORS 33
6.1. Economic Environment 33
6.2. Government Support 34
6.3. Foreign Aid 35
6.4. Technology, Research and Development (R&D) and Innovation 35
6.5. Environmental Concerns 37
6.6. Labour 38
7. COMPETITION 38
7.1. Barriers to Entry 39
8. SWOT ANALYSIS 39
9. OUTLOOK 40
10. INDUSTRY ASSOCIATIONS 40
11. REFERENCES 41
11.1. Publications 41
11.2. Websites 42
APPENDIX 1 44
Summary of Notable Players 44
COMPANY PROFILES 50
AGRI-MILLING (PVT) LTD 50
ARISTON HOLDINGS LTD 52
BRITISH AMERICAN TOBACCO ZIMBABWE (HOLDINGS) LTD 56
CAIRNS FOODS LTD 59
COTTON COMPANY OF ZIMBABWE LTD (THE) 61
EASTERN HIGHLANDS PLANTATIONS LTD 63
HIPPO VALLEY ESTATES LTD 65
NATIONAL FOODS LTD 68
OLIVINE INDUSTRIES (PVT) LTD 71
PARROGATE ZIMBABWE (PVT) LTD 73
POWERFUL GRAND INDUSTRIES (PVT) LTD 75
PROFEEDS (PVT) LTD (ZIMBABWE) 77
PURE OIL INDUSTRIES (PVT) LTD 80
QUTON SEED COMPANY (PVT) LTD 82
RIFT VALLEY CORPORATION LTD 84
SEED CO LTD 87
STARAFRICA CORPORATION LTD 91
TANGANDA TEA COMPANY LTD 94
TRIANGLE SUGAR CORPORATION LTD 97
UNITED REFINERIES LTD 99