Schweppes’ tomato business teetering

BEVERAGES maker Schweppes Zimbabwe Limited (SZL)’s newly introduced tomato business is struggling to find its feet due to lack of competitiveness.

SZL commercial and public affairs director Mrs Unaiswi Nyikadzino, said the company’s Farm Style tomato paste, which is produced by Best Food Processor at its Norton plant, was struggling on the market largely due to the influx of cheap imports.

“This year the tomato business is a bit of a challenge, obviously the cost structures are still high in terms of imported fertilisers and chemicals for farming so that ends up pushing prices up. You find out that the export market competitiveness is a challenge but domestic business has been decent.

“Obviously the levels of domestic business is also dependent on how the economy is doing, ultimately the other manufacturers are also supplying the same consumers who might be struggling with low disposable incomes. At the end of the day that presents a challenge,” she said.

Mrs Nyikadzino said the low capacity at the Norton factory was delaying the company’s prospects of opening another plant at Esigodini in Matabeleland South Province.

“We are not yet there obviously we would like to increase our investment in terms of production capacity in the southern region but for right now like I said ideally a lot of the capacity we have in the original plant in Norton we had been planning to be exporting but our pricing competitiveness is still an issue.

“China is still far more competitive on growing of tomatoes and processing of tomatoes. Because of the competitiveness of China, we still have excess capacity. So with excess capacity we will not be opening another facility until a time as a business we have utilised that capacity,” she said.

Mrs Nyikadzino said the company was looking forward to raking more foreign currency through improved exportation of its fruit beverages to support its tomato business.

“We can grow our export business by selling the beverages to customers outside the country. So we hope from doing so we can generate decent foreign currency for the food processing division. We have had limited exports with the beverages, which have been going to Zambia, Namibia, Botswana, South Africa and Mozambique. That’s where we have exported a few of our products to. We can also export to anywhere in the world if there is demand and the pricing and cost structures allow for profits to be made and like I said, we would have to get our cost of production down on the beverages side so we can be competitive in the global arena,” she said.

Mrs Nyikadzino said the company was working on enhancing orange production buoyed by the high demand of citrus juices globally.

“You find that within the processing division the demand is high especially for citrus. If we fast track and focus on orange production, it will do wonders for us because orange juice demand is high but we just don’t have enough oranges coming in for processing…all the work we are doing is to try to engage other stakeholders to see how as a country we can expand citrus production,” she said.

Mrs Nyikadzino said the company was currently hamstrung to initiate orange out growers scheme stating that about $US20 000 to $US30 000 per hectare was needed to embark on a citrus plantation.

“We need investors with long-term funds who expect to get their first returns in year seven. There are people who are interested in these (particular) projects and also Government has been there. The Ministry of (Lands), Agriculture, (Water, Climate and Rural Resettlement) has been supportive in helping areas that produce citrus to expand their production capacity. Beitbridge is a prime area so there are some people who are interested in that. We are trying to engage all the stakeholders so that they take up this investment as it has good returns in the future going forward,” she said.

SZL is a leading manufacturer and distributor of non-carbonated still beverages under licence from the Coca-Cola Company. The product portfolio currently includes well renowned brands in the following categories — cordials, fruit juices and bottled water.

These products are marketed under the following brand names, Mazoe Crushes and Syrups, Minute Maid Juices, Just Juice, Bonaqua Still Water and Schweppes Still Water. The company has two manufacturing plants in Harare and Bulawayo and nine distribution centres countrywide.