24 December 2012

Tanzania: Against All Odds, TDL Roars to the Top

WITH the daily mushrooming of new foreign business ventures fuelled by the stability of the economy, it is encouraging to see a local company emerge as the best of them all.

Recently, one local company thrashed existing local and foreign companies to scoop the overall winner in the covetous President's Manufacturer of the year Award 2012, thanks to sheer dedication and determination.

Apart from that, the Tanzania Distilleries Limited walked home as the winner in the Beverage category, and they have a presidential certificate to prove it.

"Winning this award took a lot of strategies, and some of them we started to implement three years ago, when several things happened. First and foremost we stopped from being the distributor of the famous Konyagi spirit only, into a multi brand distributor and embarked on expansion of its plant to double production capacity in order to meet the fast growing demand of its products in the East African market," says the company's Managing Director, David Mgwassa.

He says that currently, the Tanzanian market has been hit by an influx of all sorts of imported spirits and wines, and for them to meet this challenge; drastic steps had to be taken. Mgwassa says that to avoid self extinction, the company had to embark on the implementation of several strategies, most of which were influenced by the changing business trend.

He says that after managing to dominate the Tanzanian market, the company realized that it was high time it expands its market base, and that is how they decided to enter the East African market on the back of the East African Community. "Breaking the Kenyan market was tough, and we were faced with very many challenges from our counterparts, who went to the extent of calling Konyagi, which demands respect in our local market, as 'Chang'aa', or illicit brew common in East Africa," he says ruefully.

He says that their battle for the penetration of the Kenyan market entailed hard work and the involvement of the Tanzania Bureau of Standards, and when they finally managed to overcome this, other complex challenges arose. With Kenyans already enjoying the taste of their locally made Gilbeys Gin in a 205ml bottle, TDL introduced its Konyagi brand in its 200ml bottle, and they were duly informed that they should change the size of the bottle to meet the required Kenyan standards of 205ml.

Not deterred, Mgwassa said that TDL complied, and had special 205ml bottles made for export into the Kenyan market, but after a short time the Kenyans told them that export gin products should be in 250ml bottles. "To be honest, penetrating the Kenyan market was a major hurdle, because they put in a lot of effort in trying to frustrate us, and we incurred huge extra costs in succeeding, but we were determined, come what may, we will sell our products in Kenya," Mgwassa says with a tinge of pride in his voice.

He is however disappointed to note that Kenyan products easily enter the Tanzanian market with no dubious specifications imposed on them, for example the gin and whisky products imported from Kenya, are widely available in Tanzania, in 205 mls bottles, the configuration to which they had stopped and declined TDL to use the same, thus, saying if the EAC is to succeed, there should be a level playing field, in all areas and all countries.

This year alone, Mgwassa proudly points out that TDL has managed to record over two million dollars in sales from export only, saying that this is just the beginning of bigger business exploits. Currently, Mgwassa says that TDL exports four trucks of its Konyagi and Valeur gins every week to Kenya, Uganda, South Sudan and Rwanda. "Of all the markets, the Kenyan market is lucrative, that is why we now have our own distribution centres with sales staff, and we have put up billboards to advertise our products," he says.

The other major strategy has been its venture in making local wines to which wines known as Dodoma and Imagi wines are made using local grapes grown in Dodoma. To enhance its pedigree, TDL also manufactures locally the Overmeer wines and Grand cru wines under licence from South Africa using grapes from Dodoma, thus this efforts clearly underscores the emergence of locally produced crop, getting and creating a huge multiplier effects to impoverished local farmers in Dodoma region.

Mgwasa, who is also the Director of the East African Business Council, says that TDL has a huge role to play because local crops are not profitable unless they are used into production of local manufactured products, meaning they have a value added creation, to which TDL is now putting the theory into practice and making it grow, across all sectors of Tanzania's economic activities. He says that if you look at countries which are successful in the agriculture sector, they don't sell crops as crops, but instead they have added value to their crops and have created enough agro-industrial processing industries that also provide jobs to the Tanzania youth.

He says "stop selling maize to neighbouring countries, but sell them sembe". "Our position as a private sector company is to continue to facilitate the value addition of crops cultivated in Tanzania and create products out of them so that they can be more profitable than they already are. That is the competitive advantage which god has given to us, and all our neighbours want to have a slice of it", he says.

With new and modern packaging to supplement their products, Mgwassa says that they hope that in the near future TDL will be a force to reckon with on its entry in the Central and sub Saharan countries. He also said, just like other agricultural crops, Tanzania has great potential in the wine making sector, adding that with proper monitoring , good policy governance and good business decisions, it can be a major market for Africa and the world.

"Tanzanians should start seeing new opportunities seen from foreigner's eyes, instead of interpreting opportunities seen from local Tanzania eyes, which lead to wasted opportunities, duplication of projects , as the former have taken advantage of available opportunities, by using an "outside eyes and interpreting it to a local outlook, while we sit and start pointing fingers," he finished.

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