The drive to Zimbabwe’s capital, Harare, is slippery in light winter rain. The sky is full of rich grey clouds; on the ground, the country is paved with cracked roads, poverty and struggle.
On the way, many businesses are boarded up, their paint peeling and doors closed. As we arrive in Harare, many shops are packed with imported goods, but, in Workington, an industrial suburb in the south west of Harare, there is a stubborn survivor – a factory that has been producing Zimbabwean products since 1978.
Rank, founded by Amish and Ketan Naik’s grandfather, is the leading stationery supplier in Zimbabwe. It also distributes paper and board to the printing industry and manufactures plastic goods. Their grandfather arrived in Zimbabwe, via Zambia, from India in the late 1960s.
Business in Zimbabwe thrived until the country hit hyperinflation in the early 2000s. Although the factory is stacked with goods and 102 employees, like many businesses here, the lack of money in the banks threatens its survival.
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The company has ample money in the bank but it can’t take it out to buy raw materials.
“We are being optimistic because if we are being pessimistic about this whole thing it won’t end well. We have been breaking even for the last six months, last year we were 3.5 percent down. We believe this year we are going to be 20 percent down or probably more,” says Ketan.
The company will cut the number of goods they produce to survive. They say they will try managing their overheads, because their staff is the last cost they want to cut.
“We will work within our means; effectively we will produce what we can in terms of what we can purchase in terms of raw material. It also means we have narrowed our gains down, guided by our industry,” he says.
It’s been a struggle over the last decade to keep the doors open.
“We had to scale down to the minimum. We were down to almost 10 percent, or less than 10 percent, because we were trading simply to pay wages. In the past, during high inflation, it came down to where our staff would just come in to have a meal because by the time they got their money, and went home, it was worthless,” says Amish.
The Naik brothers say their biggest threat is the weak economy. In a way, the recent ban on basic goods imports, which everyone is complaining about, may help companies like them.
“We estimated, for example, that in the exercise book industry, 40 percent was being imported from South Africa and 60 percent bought here. The tariff protection came in August 2015 and there has been a shift, we can say nine to ten percent or so increase, on our manufacturing, and the statistical growth shows it boosted our production,” says Amish.
Another Zimbabwean entrepreneur, Frank Buyanga, with a finger on the pulse, featured in FORBES AFRICA in 2013 when he had an Interpol notice imposed on him by government. He is back in business in Zimbabwe and thinks that the ban on imports is sensible as it protects home-grown industry.
“The advantages of doing business in Zimbabwe are the highly educated and generally honest workforce, good infrastructure and sophisticated business climate, especially when compared to other countries in Africa, except Botswana, Namibia and South Africa. The main disadvantage is the increasing level of corruption,” says Buyanga.
Ketan agrees the ban could work; but not with a weak economy.
“It doesn’t help as much because where there is a shortage created by us not having raw materials, the smugglers start because they now see an opportunity. If there is a shortage in the market of the product, the pricing would mean 50 percent mark-up”.
Even Rank’s suppliers are not happy.
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“Our suppliers are saying to us that, ‘Guys we have supplied the goods you need to pay for those’. We have sort of done a reverse circle where initially we had to pay upfront; we built our relationships so that they provide us with credit facilities. Now we are ok, the credit facilities need to be reduced to zero and start paying upfront because we are not able to sustain them,” says Ketan.
Making a bit of money through exports into neighboring countries is not an option because it is expensive to manufacture products in Zimbabwe.
“A Malawian manufacturer, for example, would buy raw materials from the same places as us. But, we would pay let’s say $300 for a job yet they would pay less than $100 for that same job. How do we compete? Their expenses become lower, therefore their goods are cheaper.”
Rank is not the only Zimbabwean company running a tight ship.
On the other side of Harare, Melissa Mafunga, Managing Director at Hamilton Finance, says 30 to 50 people walk into their offices each day seeking to borrow money, most of these, struggling small business owners.
“Sometimes they come borrow money because they want to buy stock or pay a little bit of salaries. From here, I see that many small businesses are run on credit. Due to the cash challenges the country is facing, the default rate has risen by 75 percent this year. So we make sure we hold collateral before we lend out money,” she says.
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Joyce Nousenga, General Manager at Hamilton Insurance, says business is slow because insurance is at the bottom of the list for companies.
“Even companies are slowing down on their purchase of insurance and most people opt for minimal cover, of which most of it is statutory. Business is tough for everyone, so much that they can’t even protect the little they have through comprehensive insurance,” she says.
We leave Amish and Ketan with hope that they will carry on breaking even in a country that is struggling to do so.

The Breakeven Blues

When most of us think about rubbish, we imagine dirt and all kinds of nasty diseases. But for South African businesswoman Lilly-Girl
Dukada-Hentcho, waste is a treasure.
She has been in the waste management business in the country for nearly three years, and is now looking at expanding not only across South Africa, but also elsewhere on the continent.
“The environment is my passion and waste is gold. Success is not only about money; it’s also about changing the mindset of people about waste and recycling,” she explains.
Dukada-Hentcho is part of a group of women entrepreneurs who are stepping up to the plate in the waste management sector. It is an industry that is growing rapidly in South Africa and other parts of the world, as people become more enlightened about conserving the environment , and consumerism continues to spread.
“As we know, the whole world is encouraging Africa to take a big step in saving the environment. The old waste collection mandates have changed now from just collecting waste and dumping.”
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Dukada-Hentcho, along with her husband, Philippe, formed DNH Recycling and Waste Management Services in Midrand in Gauteng three years ago. The company focuses on separating waste at source.
Although she had had some experience in running a waste management company in the United Kingdom, when she started her venture  in South Africa, Dukada-Hentcho says the sector was virtually a no-woman’s land.
To add to her woes, recycling did not happen on a large scale in the country, with many considering it a trendy suburbia practice.
“It was like entering the lion’s den. We had to offer free pilot [projects] for them to see what they were buying,” she says.
But since then, the picture has changed. Dukada-Hentcho credits her strong belief system and willingness to take risks for the success of her company, which also does waste analysis for clients, including Famous Brands, at
38 sites.
In its first year, DNH brought in $100,000. The following year that had increased to more than $240,000. This year, she plans to double her revenue again. The company is looking at ventures in the Democratic Republic of the Congo and Nigeria, and is also in meetings with the University of Johannesburg with a view to collaborating on a waste energy project.
Dukada-Hentcho is just one example of a number of South Africans cottoning on to the fact that waste has value.
In May, Johannesburg, South Africa’s economic hub, held its first waste management summit, and Mayor Parks Tau challenged delegates to view rubbish in a different light. On average, South Africans each produce about one kilogram of waste a day, and if Johannesburg does not start diverting waste on a much bigger scale, none of the current landfill space will be around in 10 years’ time.
According to a baseline study conducted by the government, the country generated 108 million tons of waste in 2011. Ninety-eight million was disposed of in landfills, and only 10% was recycled through various forms, such as separation at source, composting and buy-back centres.
The latest statistics, from 2009, estimate South Africa’s waste sector to be worth $1 billion. Government, which has earmarked the green economy – waste in particular – as a priority area to build the economy, believes the sector can grow from its current 0.56% of Gross Domestic Product (GDP), to 1-2% of GDP. In Europe, the eco-industry is showing growth rates of 7-8% per annum.
The concept of a green economy is emerging much faster in South Africa compared to the rest of the continent. In fact, it is one of the most important elements in the country’s new growth plan; the creation of a lower-carbon economy is being punted as a major source of jobs.
South Africa’s Industrial Development Corporation, a development finance institution, has earmarked $2.5 billion over five years to 2015/16 for the development of green industries. In partnership with German development bank, KfW, the IDC has also allocated $50 million to a Green Energy Efficiency Fund. It is aimed at stimulating investments by local entrepreneurs. One of the projects already in progress generates biogas from abattoir waste. Funding options for waste management and recycling technologies are also being developed.
“Innovation is considered crucial in growing and sustaining the waste industry. We need new and better ways of doing things,” Henry Roman, from the national Science and Technology Department, told delegates at the waste summit.
Traditionally the sector, which the United Nations Environment Program values at $437 billion a year worldwide, has been epitomized by a large participation of women at the bottom end. There are about 15 million waste pickers in developing countries and they largely consist of women and children.
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However, in South Africa, the face of the sector is changing, and women are increasingly becoming key players. They include the president of the Institute of Waste Management of Southern Africa, Suzan Oelofse; the CEO of PET Plastic Recycling Company (Petco), Cheri Scholtz; the operations director of the Paper Recycling Association of South Africa, Ursula Henneberry; and EnviroServ group property and marketing director Delia Lavarinhas.
Oelofse says researchers in the waste sector at the Council for Scientific and Industrial Research and at universities are mostly women.
“Women care more. We realize more what the impact is of bad management, and also we care more about the aesthetics of waste,” she explains.
At household level, Oelofse believes there will be an increased focus on recycling and waste separation across the country as South Africans become more aware about preserving the environment.  Also, she says there are a number of growth areas in the waste management sector that women can tap into.
These include extracting usable resour-ces from industrial waste, separating waste at source and waste-to-energy projects, such as developing landfill sites for the harvesting of methane gas as an alternative energy source.
There are also opportunities for women in the post-consumer recycling of water and soft drinks bottles that contain polyethylene terephthalate (PET).
Under Scholtz’s stewardship, PET recycling has almost doubled in tonnage over four years. Close to $19.3 million was paid for sorted, baled bottles delivered to recyclers, and approximately $42 million was injected into the local economy through the sale of recycled PET for downstream products.
“There is still much work to do to capture the remaining percentage of bottles that were not collected, and with the post-consumer PET recycling targets set to rise to 58% in 2017, with a growing market size, increasing the volume of bottles collected for recycling is thought to be the best method of achieving this,” explains Scholtz.
“There is a need for more visible, accessible infrastructure in the form of drop-off facilities, buy-back centres and materials-recovery facilities. This is enabled by increased investment in the recycling sector, making it a bankable sector.”
Also, Scholtz says there is a need for constant innovation in the field of design, to ensure that the bottles produced are actually recyclable, and that labeling is improved so that consumers are encouraged to recycle them and they do not end up in landfills.
Another growing area of opportunity is South Africa’s development of a sustainable tires recycling industry. According to the Recycling and Economic Development Initiative of South Africa, a waste management fee on new tires is expected to generate around $70 million per year. Eighty percent of it will be ploughed directly into developing the industry.
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While the outlook for the sector is bullish, women still face an uphill battle if they want to make their mark.
Aliena Ratenazi, an entrepreneur who has been researching the waste management industry for four years, and who is getting into the business herself, says that women are often the worker bees who compete at the lower-level structures.
“The barrier of entry in the waste sector comes with a heavy price tag for women… Today, a lot of women contribute to the household and need to make their businesses a success, which within this sector is not an easy task,” says Ratenazi.
“South Africa as a country is not giving the support in the field of educating, funding and training women to enter the waste sector, as we have no role models in this sector&#8230; [It] can be a huge green industry that can focus on major transformation with the optimization of women in waste, where the benefits are considerable and tangible. [This], in turn, would mean huge growth for South Africa, as there is an abundance of waste available in our landfills,” she says.
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As South Africa shifts focus to industrializing the country in a sustainable way, the managing of waste will become more of a priority. The time is ripe for women to investigate the different technologies out there, which will have a seismic impact on how the industry operates, and ultimately, how much money can be made

Tag: Paper

FORBES AFRICA SOCIAL MEDIA

The Breakeven Blues

TURNING RUBBISH INTO GOLD