Zimbabwe - Overseas Development Institute

f u r t h e r capacity so to expand food e x p o r t s ' 6 . food manufactures
tend ( d i s p r o p o r t i o n a t e l y to many other manufactured goods)
to be high bulk and low value products, margins are small and
therefore a f a r higher throughput and even greater c a p i t a l outlay
are f r e q u e n t l y needed to make exporting a v i a b l e p r o p o s i t i o n .
F i n a l l y , not a l l products made f o r the domestic market were
s u i t a b l e f o r export, e s p e c i a l l y without i n c u r r i n g s u b s t a n t i a l
c a p i t a l costs i n v e s t i n g i n c h i l l e d and frozen containers to
transport products to the l a r g e r markets beyond A f r i c a ' ' .
To these longer term explanations need also to be added
those of more recent o r i g i n , discussed p a r t i c u l a r l y i n s e c t i o n
I I I above. There i s l i t t l e doubt, f o r example, that i n p a r t i ­
cular the c o n s t r a i n t s of p r i c e c o n t r o l , i n c r e a s i n g l y severe
f o r e i g n exchange shortages, the lack of f o r e i g n exchange i n
neighbouring states and the higher f r e i g h t and insurance costs
r e s u l t i n g from d i s r u p t i o n to the Mozambique transport routes have
had an equally severe e f f e c t on recent production l e v e l s of the
f o o d s t u f f s sub-sector and on expanding manufactured food exports.
Indeed i n the case of the sugar industry, ZSR argues that the
e f f e c t of l e s s than s u f f i c i e n t domestic p r i c e increases has meant
that necessary investment to expand capacity even to meet future
domestic demand has been i n serious doubt for the l a s t few years.
So much f o r the "broad-brush" a n a l y s i s of the f o o d s t u f f s
sub-sector. Further i n s i g h t s i n t o i t s development, i t s current
problems and p o t e n t i a l , can be gleaned by examining some companybased
evidence.
4.2 Some Firm-Level Evidence
A recent o v e r a l l study of f o r e i g n investment i n post-
Independent Zimbabwe, with case-study company evidence'', has
h i g h l i g h t e d the f a c t that although there has been minimal new
f o r e i g n investment since 1980, among the most s i g n i f i c a n t
investors have been companies with i n t e r e s t s i n the food b u s i ­
ness: Dandy (Denmark), s e t t i n g up a new company to manufacture
and export chewing gum; Heinz's major investment ( i n excess of
US$15 mn) i n O l i v i n e I n d u s t r i e s , also with a view to exporting
and the UK's Dalqhety i n a j o i n t venture with the l o c a l conglomerate.
Cairns Holdings. The involvement of at l e a s t two of
these f o r e i g n companies was based i n large measure on t h e i r
b e l i e f i n the p o t e n t i a l f o r manufactured food exports. This
confirmed a view held by a number of Zimbabwean companies that
one of t h e i r fundamental weaknesses i n expanding s u b s t a n t i a l l y
i n t o export markets was the absence of both modern technologies
for food development, t h e i r outdated and inadequate research
f a c i l i t i e s and i n the high cost of reaching the most l u c r a t i v e
markets outside the A f r i c a n continent, rather than i n crude p r i c e
and q u a l i t y f a c t o r s . This explains the w i l l i n g n e s s of l o c a l
firms to form c o l l a b o r a t i v e ventures with m u l t i n a t i o n a l corporations'
' .