Zimbabwe - Overseas Development Institute

I I I . SUCCESS AND FAILURE AT THE MICRO-LEVEL"
We now move away from the broad macro-analysis of i n d u s t r i a l
performance to more d e t a i l e d micro-data. In t h i s s e c t i o n we use
some f i r m l e v e l evidence, gathered i n mid-1987, to attempt to
throw l i g h t on the main f a c t o r s i n f l u e n c i n g performance''. The
purpose here i s to h i g h l i g h t those f a c t o r s c o n t r i b u t i n g to
success or f a i l u r e of p a r t i c u l a r firms. While, c l e a r l y , "success"
and " f a i l u r e " can be evaluated d i f f e r e n t l y depending upon
the norms chosen, i n conjunction with the t h r u s t of the previous
sections of t h i s paper more emphasis i s placed here upon the
a b i l i t y of firms to compete both on the domestic and, more
p a r t i c u l a r l y , i n the i n t e r n a t i o n a l market.
3.1 Manufacturers of A g r i c u l t u r a l Implements
We s t a r t with three firms a l l located i n a branch of subsector
9, Metals and Metal Products, which manufacture a g r i c u l ­
t u r a l implements. They are a l l e n t i r e l y p r i v a t e firms. Zimplow
and Bulawayo Steel Products are the only two firms i n the country
manufacturing a range of hand-tools and animal-drawn implements
while Tinto I n d u s t r i e s i s by f a r the l a r g e s t of the firms making
machine-drawn implements, being responsible f o r some 80% of the
domestic market^'. There are eight main manufacturers of
a g r i c u l t u r a l implements i n Zimbabwe with a t o t a l turnover i n 1985
of some $17 mn of which these three firms are responsible for
over 90%.
Using the c r i t e r i o n of the 1982 DRC scores, i t would appear
that these firms would be judged among the most e f f i c i e n t i n the
country: the average DRC score f o r a g r i c u l t u r a l implement
manufacturers was 0.91, ranging from a low of 0.40 to a high of
only 1.12, the average f a l l i n g to an extremely competitive 0.73
i f account i s taken of the overvalued d o l l a r r a t e . What i s more,
i n 1982 a l l three firms were exporting each with sales of over
$100,000, while published r e s u l t s from Zimplow showed a posttax
p r o f i t / t u r n o v e r r a t i o of 9% and from T i n t o I n d u s t r i e s of
some 6%. Beyond 1982, developments appeared to confirm t h i s
b u l l i s h assessment as both turnover and exports continued to
expand: by the mid-1980s Tinto I n d u s t r i e s were exporting
products to the value of between $1 mn and $2 mn a year, Zimplow's
exports t r e b l e d from 1982 to 1986, reaching an average of 24%
of turnover i n the years 1984 to 1986 and by 1985 Bulawayo Steel
Products were exporting 45% of production^''.
These data and assessment, however, at best give'an extremel
y d i s t o r t e d and at worst a t o t a l l y f a l s e p i c t u r e of the longer
term v i a b i l i t y of the firms i n question. Zimplow and Bulawayo
Steel Products argue that i n the e a r l y 1980s t h e i r respective
firms were i n such serious d i f f i c u l t i e s that i t was quite l i k e l y
that both could have folded, while from 1982 to 1983 Tinto
I n d u s t r i e s ' s p r o f i t of $826,000 turned i n t o a l o s s of $11,000 and
the company suffered serious f i n a n c i a l d i f f i c u l t i e s over the next
few years^ ^ .