Zimbabwe: Tobacco Firms Seek to Broaden Market

25 September 2024

The Tobacco Industry and Marketing Board (TIMB) must assist indigenous companies secure export markets for their produce as part of efforts to widen their revenue base, executives of the companies have said.

The representatives met separately the Parliamentary Portfolio Committee on Lands, Agriculture, Water, Fisheries and Rural Resettlement chaired by Chivi South legislator, Cde Felix Maburutse on Friday last week.

The committee toured premises of some companies in the tobacco industry to familiarise themselves with their operations.

Munakiri Leaf Tobacco chief executive Mr Simba Munakiri said: "The marketing aspect is not always about local, isn't it? If they can source the business out there on behalf of indigenous companies. As indigenous companies we produce a certain quota for them. We do the costs, we pay everything for them and they market it on our behalf."

Mr Munakiri said TIMB could assist them based on their historical revenues. Farmers participating in the scheme stood to benefit from the extra money generated from direct exports rather than through an extra commercial layer taking a cut.

Head of operations and agronomy at Norton Leaf Tobacco Mr Richard Machingura said indigenous-owned companies in the tobacco sector were struggling to access foreign markets and would be glad if TIMB assisted them.

"As tobacco companies, we are also facing some challenges in the markets. You will find that most of our tobacco locally, we are just doing the intermediate trading. So, we have a challenge of markets where we are not really able to export our tobacco and this is affecting the growth of our industry," he said.

Zimbabwe's tobacco export earnings increased by a whopping 138 percent year-on-year to reach US$436 million in the first quarter of this year.

Traditionally a leading exporter of leaf tobacco, the country aims to extract more revenue from the business by moving to higher value products, such as cigarettes made in the country before exporting.

In 2021, the Government adopted the tobacco value chain transformation plan, which seeks to build a US$5 billion industry by 2025.

Last year, tobacco farmers produced 296 million kg, which was the country's biggest ever crop. This year, output was expected to fall to about 250 million kg due to the El Nino-induced drought but with anything approaching reasonable rains will exceed the 300 million kg milestone next year.

Tobacco output has been generally on the rise as more farmers take up the crop while prices have equally been fair. Production from several tens of thousands of farmers, manly from small scale farmers is now well in excess of what the large-scale commercial farmers were growing before land reform.

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