Business Review_Issue 1_softcopy

Issue 01. January - February 2016
The FMCG Issue: FMCG in Zambia:
Still the next big thing.
How to get your product
onto shelves in Zambia.
A frank interview with Hon.
Minister Given Lubinda.
Is your brand safe in
Zambia?
Lifestyle: Lusaka’s gated
community.

4 5
Contents
VITAL STATISTICS
Zambia at a Glance
06.
Advertorial
Not a job to sniff at
35.
Advertorial
Need to get your goods onto Zambian shelves?
36. REVIEWS
Podcast Review: No Such Thing As A Fish
Restaurant Review: The Horse Shoe
42.
LIFESTYLE
Roma Park: Lusaka’s gated community
44.
LIFESTYLE
Polocrosse’s Star: Lauren Watson
We get to know the horsey crowd
41.
BUSINESS BRIEFS
Business Bites: Local business news was
dominated by internal and external headwinds
07.
CORRIDORS OF POWER
An interview with Honourable Minister Given Lubinda:
A man with a vision
10.
INTERNATIONAL TRADE
Hungary and Zambia: A beautiful partnership
11.
MONETARY POLICY
Inflation surged in December:
Investors and consumers need a boost in confidence
13.
ENERGY
Renewable energy to the rescue?
14.
FEATURED INDUSTRY: FMCG
Zambia’s Top Retailers
Who’s who in the retail trade
16.
Industry Overview: More is More
The evolution of Zambia’s FMCG story
17.
Consumer Trends
No such thing as the ‘African consumer’
19.
We’ve Got The Skills
Managing human resource in the FMCG sector
22.
How Big Brother Can Reduce Your Premiums
Tracking and insurance in FMCG
23.
Is Your Brand Safe In Zambia?
Ensure your brand is registered to protect it
24.
Zambia’s Tax Incentives In The Fmcg Industry
An outline
25.
On The Ground
A day in the life of a small grocer
26.
Business Commentary
David, Goliath and the cost of capital
29.
Profile: Monica Musonda
If it was eeZee, everyone would do it
30.
Cover image: Thinkstock
Monica Musonda: Compound Queen
by Gareth Bentley @extraordinaryzambia
Message from
Centurion Advisory Services
Things are finally stabilizing after
the perfect storm of external and
internal shocks hit our economy.
But it will be a year, at least, before
we can start thinking beyond mere
survival again. An historic failure to
substantially diversify the Zambian
economy has left us vulnerable for
the long-predicted and expected
slowdown in Chinese growth and
consequent copper price drop.
Coupled with a crippling power
crisis and two ratings downgrades
(more to come?) and you’ve got
yourself a poorly performing
currency and a crisis in investor
confidence. Add to that eight-hour a
day load shedding (often more) and
dinner table conversation is pretty
gloomy.
Nine out of ten businesspeople
interviewed for this edition were
resigned to the short run losses
they’ll be making in the year
Dear Reader,
Welcome to the first edition of
the Centurion Business Review;
a publication our company is
proud to introduce to the business
communities of Zambia, the GCC
States and South Africa.
Centurion Business Review’s core
mission is to provide thought-
provoking reports, analysis and
discussion on which preliminary
From the Editor
Leani Le Roux
Editor
Wordsmack Publishers
@leaniw
decisions can be made on doing
business in Zambia. Foreign
investors interested in Zambia,
current captains of Zambian
business and Zambian business
influencers and stakeholders
will find this publication an
indispensable handbook to making
it in Zambia.
In achieving this mission, Centurion
Business Review comprises of
contributions from both our in-
house writing team and from
professional service providers with
substantial experience in their
respective fields. We look forward
to your feedback and trust this
first edition has gone some way in
achieving its mission. We wish you
all a happy and prosperous 2016!
Andreas Savva Damalis
General Manager
adamalis@centurionzambia.com
Contributors:
Andreas Damalis
Musa Dudhia & Co.
Irmgard Erasmus
Leani Le Roux
Miyanda Katiwa
Renco Associates
Sean Van der Maas
Sipho Phiri
Editorial Design:
Art Direction
Deeva Amin
Photography
Joseph Mwenya
Design Team
Paul Sinyinda
Jacob Kamina
Sikota Mbewe
Printers:
New Horizons Printing Press
Sales:
Chimanga Sean Chunga
+260 973 545 367
cchunga@centurionzambia.com
Publishers:
Centurion Advisory Services does
not warrant or assume any legal
liability or responsibility for the
quality, accuracy, completeness,
legality, reliability or usefulness of
any information, product or service
represented within our magazine.
Views in this publication are not
necessarily those of Centurion
Advisory Services.
Contact us:
+260 211 250278
Stand No. 20849,
PSC Corporate Park,
Alick Nkhata Road,
Mass Media, Lusaka
to come. Yet asked if they’ll be
divesting from the country and the
answer is a resounding ‘no’. There’s
much opportunity here. What this
magazine won’t do is sugarcoat the
bad news, its purpose and value,
to you dear reader, being on-the-
ground, measured reporting of the
business and economic environment
in Zambia. Born from a need to
read smart, informed and focused
business analysis, the Centurion
Business Review aims to fill the
gap and help you make informed
decisions about your career, your
business or business opportunity
in Zambia. What we’ve seen from
our interviews with the movers
and shakers of Zambian business is
that there are plenty opportunities
for big money while the smaller
players are adopting a wait-and-
see approach. However, if you’re
in the FMCG industry and want a
presence in Sub-Saharan Africa you
have to get moving as the industry is
continuing to open malls, stores and
distribution houses. But be aware of
how expensive it’s getting to run a
business here.
Considering the usual constraints of
doing business in Zambia: getting in
touch with people who are ‘out of
town’, load shedding and fee hikes
affecting everything from our rent to
our phone bill, this magazine looks
pretty good. And it’s everything
you’d expect it to be beneath the
covers. Thanks to the hard work
by the folks at Adlab and Assegaai
and the brains behind everything,
Centurion, this magazine will
hopefully go on to shed some light
on a very insular industry.

CHARLES BOTA:
20 YEARS WITH SHOPRITE
Charles Bota named as one
of the six best performing
Regional Managers in the
Shoprite Group in 2003
and was part of the winning
team to receive recognition
as the second best performing
management team in the
Group in 2007.
Zambian national Charles Bota achieved the distinction of being
appointed as the first Zambian General Manager for Shoprite
Zambia, which is the second largest operation of the South
African based Shoprite Group outside of the RSA.
As one of the first of 13 Zambian employees to be selected
for appointment and training through Shoprite’s Management
Training Scheme in South Africa when the Group entered Zambia
in 1995, Mr Bota’s perseverance and sustained application
of knowledge has proved him to be an invaluable asset to the
Shoprite Group. A combination of dedicated professional
commitment and continued personal growth has allowed him to
develop and equip himself with the required skills for this position.
Mr Bota has 32 years of experience in the supermarket retail and
distribution industry with a flair for sales and marketing.
Mr Bota’s first appointment in the Group was Branch Manager
for Shoprite Ndola at the end of 1995. Within a year he was
promoted to Regional Manager where his responsibilities
included overseeing operations for nine Shoprite supermarkets
and four Hungry Lion fast food outlets.
Hard work and dedication saw Mr Bota being promoted into
the position of Deputy General Manager in 2005, where he
focused on the daily sales operations of Shoprite and carried total
responsibility for all Hungry Lion operations in Zambia.
During his career at Shoprite Mr Bota has been personally involved
in the development and growth of numerous new branches in
Zambia and also assisted with the setup of a Shoprite branch
in Malawi and the DRC. He was named as one of the six best
performing Regional Managers in the Shoprite Group in 2003
and was part of the winning team to receive recognition as the
second best performing management team in the Group in 2007.
His work history includes working in Zimbabwe, Malawi, Ghana
and the Democratic Republic of Congo, giving him tremendous
experience in trade and business in Africa. He also holds non-
executive directorships in various Zambian subsidiaries of the
Shoprite Group.
Mr Bota is married to Mavis Kyakilika and they have one son.
Being a Christian, Mr Bota attributes his success to God, the
support of his family and colleagues as well as an honest and
hard work ethic. His recreational activities include a variety of
sports and he is also an avid musician.
Shoprite Zambia currently operates 26 Shoprite supermarkets,
one Usave store, four OK Furniture outlets and 18 Hungry Lion
fast food outlets.
ACTION AUTO
TEL: +260 211 226 205/221 076www.actionautozambia.com | salesadmin@actionautozambia.com
CALL OR VISIT US TODAY FOR YOUR TRAILBLAZER.
Terms and Conditions Apply. Model/s shown may differ. Errors & Omissions Excepted.
STRONG PERFORMANCE | ULTIMATE COMFORT &
SAFETY, FOR UP TO SEVEN PEOPLE
DARE TO
DISCOVER!It’s the perfect harmony of design and luxury,
it’s the New Chevrolet Trailblazer
An added bonus to your Trailblazer is Chevrolet Complete Care:
• Economical 10 000km service intervals
• 3 Years or 100 000km Warranty
• Customer Care/ Roadside Assistance Support
• Maintenance Servicing by GM-certified technicians
92776ADMAKERS.COM

9
Vital Statistics
ZAMBIAAT AGLANCE
POPULATION
OF
LUSAKA:
COPPER PRODUCTION
ESTIMATION FOR 2015:
LESS THAN
20%
POPULATION: 16 MILLION
ZAMBEEF IS AFRICA’S SECOND
FASTEST GROWING RETAILER BASED
ON Y-O-Y REVENUE GROWTH (2013)
CONTRIBUTION
OF COUNTRY
RETAIL SALES TO
GDP: 34%
(2013)
ZAMBIA’S RETAIL MARKET
RECORDED ONE OF THE HIGHEST
GROWTH RATES OF 10.8% TO
REACH US$9.1BN IN 2013
- DELOITTE’S AFRICAN POWERS OF
RETAILING 2015 REPORT
BENCHMARK POLICY
RATE:15.5% (INCREASED BY 300
BPS IN NOVEMBER 2015)
SOUTH AFRICA EXPORTS TO ZAMBIA:
ZAR29BN WORTH OF GOODS
ZAMBIA EXPORTS TO SOUTH AFRICA:
ZAR3BN WORTH OF GOODS
8
ZAMBIA HAS
THREE EUROBONDS
WITH A CUMULATIVE
AMOUNT
OUTSTANDING:
$3BN
DOWN FROM
808 000 TONNES
TO 600 000 TONNES
– MINISTRY OF FINANCE
COST OF DSTV’S PREMIUM BOUQUET:
K818 (UP 30% SINCE APRIL 2015)
PUBLIC SECTOR WAGES:
75% OF DOMESTIC REVENUE
- 2015 BUDGET
Business
BITES
coming months, due to low electricity availability.
Choppies (JSE: CHP) is still aggressively
expanding across Southern Africa and five stores
are expected to be opened in Zambia during the
2015/16 year, despite delays caused largely by the
national power shortage.
The African finance company co-founded by
American banker Robert Diamond, Atlas Mara,
has acquired Finance Bank of Zambia (Finance
Bank) for a pricey US$61m. The deal is expected
to make Finance Bank Zambia’s largest bank by
branch network and fifth largest bank by assets.
Proflight launched direct flights between Lusaka
and Durban, South Africa. Time to consider
Durban as a business destination?
The Government banned foreigners from chicken
rearing in October; or so it was reported. In reality
it’s a small revision to a bus station and markets
act that prohibits foreigners from selling chickens
at these spots, the Minister of Agriculture told
Centurion Business Review (see Article). Either
way, the investor has been left unsettled by the
resultant lack of clarity on this matter.
It was also reported that block-making and
hauling public goods by foreigners was banned,
however, as with the chickens, we wouldn’t put
too much stock into it until it can be verified.
Business Briefs
specifically whether the Central Bank would
consider raising interest rates even further in an
effort to tame inflation.
In September last year, Glencore and China
Nonferrous Metals Company’s (CNMC) Luanshya
Copper Mines announced they will suspend
operations at Mopani and Baluba, due to weak
commodity prices and power constraints. Mopani
employs more workers than any other private
business in Zambia and its temporary shutdown
will halt about 26% of the country’s copper
output. In addition to the 10 000 people employed
by Glencore, another 10 000 work for mining
contractors servicing their operations, according
to Bloomberg. Government has announced that
job cuts will only be made in close consultation
with Government, management and unions.
President Lungu spent time in the Copperbelt
trying to prevent job losses saying of Mopani
Mines “…if they have failed to run the mines,
they should tell us so we can find other investors.”
The good news is that Glencore said it would
be investing $950m over the next three years to
refurbish its Mopani Copper Mines.
The total mine retrenchment count looks as
follows (at time of print):
Glencore’s Mopani Copper Mines: 3 051
retrenched and just over 1 200 employees opting
for voluntary retrenchment.
Vedanta Resources’ Konkola Copper Mines: 1 675
with more to be retrenched over the next couple
of months.
China Nonferrous Mining Corp’s Luanshya
Copper Mines: 1 640 employees on forced leave.
First Quantum Minerals’ Kalumbila Mine is
expected to retrench around 700 employees in the
Local business news was dominated by internal and
external headwinds
Last year’s business news was dominated by
the power crisis and the spectacularly poor
performance of the Kwacha. Zambia toppled from
its position as a frontier market favourite when a
perfect storm of bad economic news hit.
After Black September and Blacker October,
the short term outlook is poor as impending
job losses, a continuing power crisis and the
possibility of another dry year compound the
impact of internal and external economic shocks.
However, these issues ahead of August’s elections
will encourage Government to more substantially
engage with the local and international private
sector for investment and diversification away
from copper exports.
Inflation will dominate the news going forward
as the cost of living erodes the spending power
of a recently formed middle class. Government
elections are coming up so it will be interesting
to see the measures taken to mitigate rampant
inflation.
President Lungu already reversed the electricity
tariff hike the state owned on power company,
Zesco, applied for in 2015. Zesco received leave
from parliament to apply to increase electricity
tariffs from K0.31/kilowatt hour to K0.88/
kilowatt hour for all clients except mining houses.
Currently, Zambia’s tariffs are the lowest in the
region. At higher tariffs, private investment into
the sector starts to make financial sense. A
portfolio of energy production plans worth a cool
$4.3bn will be viable according to Government.
This hike, however, will hit consumers hard and
is an unpopular political move for a Government
eyeing re-election in August.
Following a food inflation rate of 24% in
December 2015, potential investors should
keep an eye on the country’s monetary policy,
Author:
Image by:
Staff Writer
www.choppies.co.bw

10
The country experienced two
nation-wide blackouts in December
due to technical faults.
Delta Africa (JSE: DLA) a South
African property company with a
focus on Africa, acquired Rockcastle
Global Real Estate’s 50% interests
in Kafubu Mall and Mukuba Mall
in Ndola and Kitwe respectively.
Stephen Herring’s Rockcastle will
continue to own the other half.
A new website that tracks tenders,
consultancies, supplier registrations
and calls for funding proposals in
Zambia, called Tenders Zambia,
was launched in October. Check it
out at www.tenderszambia.com. The
team behind it also created Zambia
Weekly – highly recommended
reading for any businessperson
interested in what’s going on in the
country.
The Kwacha is expected to remain
depressed as factors like the energy
crisis, low copper prices and negative
foreign investment sentiment are
unlikely to change in the short
term. However, financial analyst
Tapiwa Msusa, from Stockbrokers
Zambia in Lusaka, says that when
the US raises interest rates, that the
Kwacha along with other emerging
market currencies may stabilize as
speculation is driving the volatility.
Msusa is skeptical that there will be
a Government-coordinated influx
of Dollars before the elections that
would make a real difference to the
exchange rate.
Copper hit a six-year low in 2016,
languishing around $2.11 a pound
(at time of writing) down from a
record of $4.66 in 2011. All eyes
are on China’s economic growth
figures to determine whether this
Business Briefs
commodities cycle is heading
for a trough. Around 70% of the
country’s exports consist of copper.
An investment in Zambia means
exposure to this commodity.
Government is building
communication towers across the
country with the aim of improving
communication in rural areas.
The project will cost an estimated
$272m.
Minister of Finance Alexander
Chikwanda announced he will retire
in 2016 on account of his age. He is
77 years old. Chikwanda in October
apologized for his ministry’s
spokesperson saying that Moody’s
rating “should be ignored because its
correctness was not discussed with
any authorized representative of the
Zambian government.”
Zambeef [LUS:ZMBF] emerged as
the second fastest growing retail
company in Africa in Deloitte’s
African Powers of Retailing 2015
report. The fastest growing retailer
is Choppies Enterprises. The report
can be viewed on Deloitte’s website.
The Bank of Zambia (BoZ) has
increased its benchmark lending
rate to 15.5% in an attempt to rein
in inflation. Caps on lending rates
were also lifted.
The declining Kwacha is wreaking
havoc on business’s rent bills as
most landlords in Lusaka charge
in Dollars. Arcades Shopping centre
has capped the Kwacha/Dollar rate at
K11 to help out its tenants. The Post
newspaper also reported that Manda
Hill – the altar at which Zambia’s
middleclassworships over weekends-
sent bailiffs to 20 of its shops.
Government has banned the
employment of workers on a casual
basis for jobs of permanent nature.
The new law will also regulate the
renewal of fixed term contracts, the
Government said.
Choppies

12 13
Corridors of Power
Author:
Staff Writer
Image by:
www.connexuscorporation.com
Honourable Minister
Given Lubinda:
a man with a vision
Investors knocking on his door for Farm Block opportunities
Honourable Minister Given Lubinda
is the man you need to see if you
need a pep talk during the worst
economic crisis this country’s seen
in 30 years. Reason is: he’s sitting
on millions of hectares of arable,
undeveloped land and is charged
with a mission of increasing foreign
investment into the agricultural
sector of Zambia.
And he’s well suited to the job –
he’s frank about both opportunities
and failures within his industry
– the kind of politician that a
businessperson can talk to and
identify with. Expecting little to
report back other than political
spin, this correspondent was
pleased to instead be presented
with a sober and encouraging view
of the agricultural industry’s plans to
diversify, encourage investment and
support farmers.
Currently there are an estimated
400 foreign commercial farmers
cultivating more than 5 000 hectares
each.
The Honourable Minister says his
Ministry’s eager to increase foreign
investment into the industry and
has just returned from the India-
Africa Forum Summit 2015. The
Indian Government and Zambia
is concluding a $14m loan for
mechanization. “Our interest is
particularly towards equipment for
small scale farmers and irrigation,”
says Hon. Lubinda.
Hon. Lubinda also says his Ministry
is reviving the Farm Block concept.
Ten farm blocks of 100 000 hectares
of land have been identified and will
be opened up to investors within
the next 12 to 24 months. A mix-
use model of ownership will be
created with farmers owning from
one to ten hectares all the way up
to large commercial owners with
5 000 hectares. A ‘hub’ consisting
of 10 000 hectares will be given to
a core venture operator which will
aim to create a market for the other
producers, as well as a knowledge
centre. “Investors are knocking
on my door for this programme
already,” says Hon. Lubinda. As to
how a potential investor can get
involved, Lubinda says that existing
entities with a proven track record
can apply for executive approval for
a block from cabinet. New entities
will bid and compete for tenders.
Hon. Lubinda comes across as a
lucid and practical man. Which
is why the recent bans on edible
oils as well as a reported ban on
foreigners rearing chickens seemed
strange. However, he insists the
media reported the details and
intent of these laws inaccurately.
“I did not at all impose any ban on
any commodities. Under the World
Trade Organisation we have the
ability to restrict the importation
of vegetable oils that can also be
produced here to protect infant
industries. This doesn’t extend to
oils like olive oil. We will import
when the local industry can’t keep
up with demand.”
“It’s purely to protect the local
farmers,” he says.
As for the chicken rearing news
reports, Hon. Lubinda says
that again, the media reported
inaccurately. “Foreigners aren’t
allowed to carry chickens on the
back of their lorry to a market or
bus stop and sell them there, that’s
all,” he says. Foreigners are still
allowed to rear chickens, according
to Hon. Lubinda. However, it is
disappointing to find no press
release, reaction to media reports
or corrections on the Ministry of
Agriculture’s website; this would
have gone some way in clearing up
the rumours that followed.
A sore topic in the agricultural
sector has been diversification. It’s
been on the agenda for many years,
and little has been done to rectify it.
“The policies we’ve been running
with in agriculture have not been
supporting diversification, we’ve
given premier attention to one crop:
maize. At input and market level,”
says Hon. Lubinda.
According to Hon. Lubinda the
Farmer Input Support Programme
(FISP - a subsidies programme to
farmers) choice of crop has always
been maze. The Food Reserve
Agency’s (FRA) crop of first choice
has also been maize. To try to break
with this focus his ministry ensured
that this year other crops will be
designated as being strategic crops.
These include soya beans, cotton,
sunflowers, sorghum, common
beans and orange maize.
What this means is the FRA now has
a mandate to buy these crops in case
there’s a collapse in the private sector
system, a safety net for farmers if the
private sector doesn’t buy, says Hon.
Lubinda.
Lubinda also restructured his
Ministry to ensure a focus on
diversification. Fisheries and
livestock have been made into
their own Ministry. “There’s no
justification or excuse that we’re
importing more fish from China
than we produce locally,” says
Hon. Lubinda. However, thanks
to a concerted effort to boost local
production, major investment in the
aquaculture industry and a naturally
conducive environment, local
production should catch up soon.
The main aim of the Hungarian
National Trading House (HNTH)
Plc. is to foster the export-activity
of Hungarian SMEs internationally
marketable products and services.
Recently, it opened trading houses
in 29 countries on four continents,
including Zambia. The HNTH’s
strategic goal, based on the
“Opening to the South” strategy, is
to also open more trading houses in
the South American region.
“Our activity is based on two
main pillars. On the one hand,
with the help of our experts and
extensive partnership network,
we continuously search for and
identify those Hungarian companies
that might be competitive on the
foreign markets as well. On the
other hand, with the help of the
already established trading houses
we are monitoring the given
markets’ needs, and identify the
potential business opportunities for
Hungarian companies,” says Guyla
Simko, director of the Zambian
office of the HNTH.
“Also, we provide opportunity to the
companies of the regions to present
and sell their products and services
in Hungary.”
Simko sees numerous opportunities
in Zambia. Centurion Business
Review had a few questions for the
Director:
What is the appetite like for
Hungarian businesses to invest in
Zambia? Have you seen a dramatic
change in this since our recent
economic troubles began?
The Hungarian investment climate
has grown noticeably in the last
years, which has not been hindered
by the recent stagnation of the
Zambian economy.
From your experience, what are
the main concerns from Hungarian
investors about the Zambian business
landscape?
The Hungarian investors are in a
surprisingly easy situation when
arriving in Zambia, since the
country is investor-friendly and
peaceful. Being director of the
Zambian office of the HNTH, one
Hungary and Zambia:
A BEAUTIFUL PARTNERSHIP
The Hungarian National Trading House is open for business
Author:
Staff Writer
“I think that Zambia
is one of the most
investment-friendly
countries of the
world.”
International Trade

14 15
of my most important tasks is to
provide a picture as complex as
possible to the Hungarian investors
about this beautiful country,
together with the potentials for the
prospective cooperation, placing
separate emphasis on the local
traditions we value.
In your opinion, what can be done
by the Zambian Government to ease
investment into the country?
I believe that the Government of
Zambia has already done a lot to
support the foreign investment in
the country. I think that Zambia is
one of the most investment-friendly
countries of the world.
In which sectors are you especially
interested in facilitating business ties?
Hungary is able to provide
internationally competitive
products, services and know-how
to Zambia. Just to name a few
examples where successful business
partnerships could be established
between Zambia and Hungary in the
close future: energetics, healthcare,
agriculture, alimentary industry and
wildlife-management.
Do you have an example you can give
to illustrate how your trading house
works?
The Government of Hungary
reacting to the worldwide economic
trends has established the HNTH,
as a background institution
of the Hungarian Ministry of
Foreign Affairs and Trade, with
International Trade
the headquarters in Budapest,
capital city of Hungary. The task
of the headquarters is to monitor,
coordinate and provide information
to the trading houses already
operating in 29 countries. Besides,
its significant task is to collect and
register the SMEs from Hungary
who would be competitive with
their export-capable products or
services, and would like to acquire
(further) export markets. The
HNTH’s important partner is the
Hungarian Export-Import Bank,
which provides favourable financing
opportunities to facilitate the
companies’ entering to the export
markets, making their products and
services even more competitive.
What should business owners do to
be able to qualify to be considered by
your trading house?
The assessment of the local
partners is happening through
a complex evaluation-system.
First and foremost we would
require informative material from
the potential Zambian partner
companies about their products and
services, with which they would like
to enter the Hungarian market. The
Hungary is able to provide internationally competitive products,
services and know-how to Zambia. Just to name a few examples where
successful business partnerships could be established between Zambia
and Hungary in the close future: energetics, healthcare, agriculture,
alimentary industry and wildlife-management.
collected material will be sent to
the headquarters by our Zambian
office, where the final decision will
be made regarding the potential
partner.
Which sectors in Zambia do you
think we’ll see impressive growth in
in the coming years?
I consider Zambia’s opportunities
outstanding within the region.
Out of these opportunities I would
highlight the mining industry and
agriculture. I feel that agriculture
will be the sector which will show
the biggest growth within the
upcoming period, and by its results
it could make Zambia one of the
most significant agricultural- and
alimentary products’ exporting
country in the region.
Why is Zambia the base for yourself
and the ‘Opening to the South’
strategy?
To summarize in short: I believe
that the country – especially with
establishing good foreign trade
relations – might become one of the
leaders of the Sub-Saharan region.
What are your plans to expand to
other countries in Sub-Saharan
Africa?
Since we have started our operations
recently in Zambia, it took us some
time to get accommodated, to get to
know the country in practice as well.
The actual work – for what we are here
–couldonlybestartedafterwards.The
HNTH already has partner offices in
the Republic of South Africa and
Botswana, furthermore, our Zambian
office is representing the Namibian
market as well. To expand our
presence, we are continuously
working on the appropriate business
partner structure.
What do you do when you find
yourself with some time off in
Zambia?
Despite the fact that I do not have
enough time to rest, I love this
country. The week consists of seven
working days for us so unfortunately
I did not have the chance to explore
all the treasures that Zambia could
share with us. However, I believe
that as a result of our hard work, we
will receive much more beautiful
memories from Zambia in the future
and that in the next interview I will
be able to give a full report about our
non-work related experience.
(reverting back to the previous
price schedule) “to ensure that poor
consumers are protected.”
WHY DO WE CARE?
Our baseline scenario sees a further
acceleration in CPI inflation over
the short term, pressured by further
increases in both food and non-food
price inflation. With regard to the
former, the commencement of the
lean season and higher input costs
(due to exchange rate pass-through
impacting the costs of fertiliser
as well as expected increases in
domestic fuel prices) will see a
higher pace of food price increases.
We expect further acceleration in food
prices despite Government support.
With regard to non-food price
inflation, the first and second round
effects of higher input costs (despite
the President’s decision to reverse
recent electricity tariff increases)
will add to severe cost-push
inflation pressure throughout 2016.
With regard to the Kwacha exchange
rate, we view recent currency
stability as unsustainable, and that
the Kwacha will regain negative
momentum due to a widening
inflation differential, balance
of payments and (severe) fiscal
pressures, as well as external factors.
However, a hawkish central bank
should help to limit forex losses.
In line with these assumptions,
we forecast that inflation will
average 26.2% in 2016. This will
necessitate further monetary
policy tightening – specifically, we
expect the central bank to prioritise
liquidity management, thereby
disincentivising speculative short
positions against the Kwacha.
Inflation
SURGED IN DECEMBER
Investors and consumers need a boost in confidence
Author:
Irmgard Erasmus
Consumer price index (CPI)
inflation accelerated to a multi-year
high in December, capping off a
dismal fourth quarter to the year.
Inflation – which remained largely
contained during the first nine
months of 2015 – gained momentum
in the fourth quarter in response to
a severe drought and exchange rate
pass-through.
Inflation measured at 21.1% year-
on-year in December, 1.6 percentage
points higher than the reading in
November.
Food price inflation, which
measured at 24.8% year-on-year
in December, contributed 12.8
percentage points to the overall
annual inflation reading and was
driven primarily by higher price
increases of maize grain, bread and
imported bread flour. In turn, non-
food price inflation which accounted
for 8.3 percentage points of the
overall annual inflation reading
increased from 15.5% year-on-year
in November to 17.1% year-on-
year in December. The increase was
primarily due to increases in the
subindices furnishings, household
equipment, routine household
& maintenance (27.9% y-o-y),
recreation & culture (26.2% y-o-y)
and utilities. Growth in the latter
index equated to 8.6% y-o-y in
December, compared to a November
reading of 5.2% y-o-y. This partially
reflected an adjustment in electricity
tariffs in December. Presidential
spokesperson Amos Chanda
however stated early in January that
the President has directed the energy
regulator to reverse tariff increases
Monetary Policy
Irmgard Erasmus is an economist & fixed income analyst at NKC African
Economics, and passionate about economics, financial markets, military
aviation and Formula 1.
You can contact her on
+27 (0)21 863 6200 or
irmgard@nkc.co.za.
Thinkstock

16
Renewable Energy
to the rescue?
DREAM EP Global Energy
(Zambia) is a private developer
of renewable energy assets in
emerging markets with expertise
in transformational projects.
Currently Zambia is amidst the
throes of a crippling power crisis.
Centurion Business Review caught
up with DREAM EP’s Country
Manager Akis Damalis to find
out more about the renewable
industry sector:
Why are you investing in solar in
Zambia?
Last year, we launched our DREAM
initiative, “Developing Renewable
Energy in Africa and Middle
East” which is primarily geared
for emerging markets where there
are currently no renewable energy
policies in place. We work with
Governments to create a blueprint
for the development of renewable
energy projects. With less than 5%
of rural Zambia having access to
dependable electricity and with the
current electricity deficit and load
shedding experience, our entry into
the market could not have been at
a more auspicious time. Further,
Zambia is gifted with excellent solar
insolation (sunlight) that effectively
goes to waste if we do not harness
this pure form of energy.
When did you start trading?
Though our company started
operations in 2006, we are a
member of the Paraskevaides
Group which is the largest Cyprus
based group of companies founded
in the 1940s. The group has global
assets and concerns in major
construction projects (building,
civil, E&M engineering), energy &
power, real estate, hotel & leisure,
pharmaceuticals & healthcare and
FMCG.
Who is your main consumer and
what are some of your products?
We effectively have three types of
client. The first could be private
individuals and/or companies
requiring a clean, alternative and
dependable source of electricity
for their needs by providing
Developing renewable energy in Zambia
Author:
Staff Writer
Energy
Thinkstock
customized solutions. In such cases,
we typically consider customers
requiring above 50KvA particularly
in the healthcare and educational
sectors but also other clients such
as gated communities and the like.
Secondly, we aim to partner with
key local stakeholders such as Rural
Electrification Authorities and the
like to deliver rapid, cost-effective
and reliable access to electricity to
a significant number of people in
rural areas of Africa. In fact, our
innovative off-grid solar mobile
solutions are rapidly deployed and
can be installed/dismantled within a
day where they are needed. Finally,
and in parallel to the above, we
deliver utility scale grid-connected
projects.
What is the investment environment
like?
The investment climate in Zambia
is attractive with the Zambian
Development Agency (ZDA)
offering a wide range of incentives in
the form of allowances, exemptions
and concessions, particularly for the
Energy sector, which is considered
a priority sector in Zambia. This is
important for companies such as
ourselves who bring in foreign direct
investment to the country.

What could the Government do to
make it easier for companies like
yourselves to invest in solar projects?
The Government has taken the
Energy sector very seriously.
Whether or not we are at the
“curing” stage rather than at the
“prevention” stage is irrelevant at
the moment. It is agreed by all that
we now need to act. The Energy
Regulation Board (ERB) has been
spearheading the introduction of
the Zambia Renewable Energy
Feed-in-Tariff (REFiT) policy and
has reached out to stakeholders
including ourselves to assist with
shaping this policy. In addition,
the recent call for proposals by
IDC for construction of a total of
600MW of solar based energy, and
the fast-tracking of power projects
currently under construction is a
step in the right direction. What
is now required is a standard and
accepted procedure for developers
to follow when considering
Renewable Energy projects and
the Government’s commitments to
become actions.
Where are your solar projects based?
Our development pipeline and
track record to date include both
Wind, Solar and Hybrid projects
in Romania, Jordan, Kenya, South
Sudan, Uganda, and soon Zambia.
We are particularly proud of
our Jordanian project where our
company was awarded the Middle
Eastern Renewables deal of the
year 2013 by the Project Finance
Magazine for a 117MW utility
scale wind project. The project
was delivered on budget and on
agreed schedule. We hope to use
our experience to emulate the
same in Zambia. We are of course
also looking at other locations,
primarily in Africa, where there
is an immediate need for reliable
electricity.
How is Zambia unique as an
investment destination in your
opinion?
Zambia has always been a peaceful
and stable African country. This
is the first consideration for a
lot of multinational companies
considering setting up operations
in Africa. Combined with the
incentives offered for investment in
Zambia, it becomes quite attractive.
Obviously, the natural beauty that
Zambia has to offer is a huge catalyst
in attracting top multinational
companies.

18 19
Featured Industry: FMCG
Zambeef Products:
Number of stores in Zambia:
122 retail outlets and 3 wholesale
Incorporated:
1994
Employs
Over 6 000
Global retail revenue for 2013:
US$1.7m
Zambeef slaughters more than
60 000 beef cattle, 5.5 million
chickens and 54 000 pigs per
annum, while also processing 11
million litres of milk and producing
110 000 tons of stock-feed and 48
million eggs per year. The group also
has large row cropping operations
(principally maize, soya beans and
wheat), with approximately
15 700 hectares of row crops grown
under irrigation and a further 8 000
hectares of rain-fed/dry-land crops
planted each year producing 120 000
tons of grain annually. – Zambeef
press release Aug 2015
Zambia’s
TOP RETAILERS
Who’s who in the retail trade
Shoprite Holdings:
26 Shoprites and one U Save
Operating in Zambia since:
1995
Employs:
+/- 3 000 people in Zambia
The top company in Southern
Africa in terms of retail revenue is
Shoprite Holdings, which operates
primarily as a grocery retail chain.
The company has the biggest store
footprint (more than 2 000 stores)
of the top 25 retailers in Africa and
operates in 15 African countries;
operating in Zambia as Africa
Supermarkets Ltd T/A Shoprite.
Shoprite Holdings has more stores
outside its home market (South
Africa) than its peers, and it was the
first company to expand into other
markets through acquisitions. In
FY13, sales in Shoprite Holdings’
supermarkets in the rest of Africa
grew by 27.1%, compared with only
9.8% in South Africa. – Deloitte’s
African Powers of Retailing 2015
report.
The Spar Group:
16
2003
Employs:
Spar plans to open five stores in the
next three years.
“Further formalization of the sector
will be a key trend underlying
the sector’s expansion in the
coming years. Limited physical
infrastructure has been one of the
main constraints to the entry of
formal retailers, as there are simply
not enough shopping centres
available at present countrywide,
bureaucratic obstacles and land
issues further complicate matters,”
says Spar Zambia’s Corporate
Affairs executive Francis Sibamba.
“At present we are a country of
middle income consumers, this
makes a promising outlook for us
as one of the fast-moving consumer
goods companies in Zambia. We
will be looking to take advantage
of the large market at the low end,
gradually starting to offer our
consumers higher-value products. “
Pick n Pay Stores:
11
2010
Employs:
“We would sell 30 to 40 cases of
Lindt in a month at our store in
Woodlands mall when we first
came here,” Pick n Pay’s operations
manager Riccardo Franco told the
Financial Times in 2015.
Pick n Pay recently opened a massive
4200 sq m store in the new East Park
Mall in Lusaka. ‘Markets outside
South Africa remain a potential
second engine of growth for Pick
n Pay. We plan to strengthen our
footprint in existing territories and
seek opportunities for sustainable
growth beyond,’ the group said in
a Stock Exchange News Service
release in 2015.
Pick n Pay’s operations outside of
South Africa saw an increase in
revenue of 13.6% and profit surge
of 34.6%.
Seismic change
The coming to power of the
Movement for Multi-Party
Democracy (MMD) in the early
90s and the accompanying rapid
liberalization of the Zambian
economy created new international
interest in the Zambian market.
Especially interested were players
originating from a post-Apartheid
South Africa eager to expand into
the lucrative and comparatively less
competitive Sub-Saharan Africa
market. Liberalization also brought
with it improvement in disposable
incomes and the distribution of
wealth. Notwithstanding a drop
in the GDP per capita between
the mid 90s and 2000s ($356.46
in 2000) occasioned by shocks
to the economy as a result of the
aggressive, and in some cases poor,
implementation of the liberalization/
privatization program, there was
a meteoric rise in GDP per capita
in the period from 2002 onwards
(reaching an amount of $1 844.80 in
2013). This effectively transitioned
Zambia from a low- to low-middle
income consumer economy with
greater quality, quantity and variety
FMCG demands.
Almost simultaneously, the harsh
economic reality of operating
without Government support
resulted in the rapid demise of the
parastatal FMCG retail stores, these
Industry Overview:
MORE IS MORE
Author:
As Shoprite, Pick n Pay and
Spar plan to open more stores in
Zambia, the market is formalizing
and modernizing. This evolution
will force local distributors and
manufacturers to redevelop their
businesses in order to survive.
Numerous new Shoprite, Pick n Pay
and Spar stores are expected to open
in Zambia in the next five years,
cementing the corporate’s retail
dominance in Zambia. Botswana’s
Choppies, a low-income focused
competitor, is opening five stores
before the end of 2016 as part of
their aggressive expansion strategy
North.
These groups, having saturated the
demand from middle- and upper-
income consumer segments, will
place ever-greater importance on
targeting and generating revenues
from the low-income mass populace
segment of the consumer market.
Shoprite is already on the move with
its U Save brand.
This formalization will continue
to place greater demands on local
distributors and manufacturers who
must, in order to survive and thrive,
redevelop their businesses on the
basis of the high volume, low gross
profit model, whilst simultaneously
improving their service delivery,
quality of product and stock
availability capabilities.
Distributors and manufacturers
should be wary of attempting to
introduce and distribute just any
brand in an increasingly brand-
dominated market environment.
They will need quality pre-
introduction quantitative and
qualitative research.
In essence, the laissez-fair, low-
investment, high-return approach
adopted by the pioneering trader
entrepreneurs is now well and truly
dead and new investors in both the
distribution and manufacturing
sections of the industry must
budget and prepare themselves
accordingly for entry and long-term
sustainability.
A recap of the industry’s
evolution:
Zambia’s command economy of the
70s and 80s was dominated by large
parastatals, controls on and a lack of
foreign exchange, a GDP per capita
of only US$664.34 (1980), regional
political turmoil, uncontrollable
currency devaluations and trade
embargos on an Apartheid South
Africa. Economic and political
characteristics that rendered the
Zambian market unattractive to
international FMCG manufacturers,
distributors and retailers. As a result,
the Zambian consumer was starved
of any meaningful availability of
middle- and upper-income FMCG
products and the focus over the
period (and as the economic
situation further deteriorated)
polarized towards the supply of
basic essentials and staple foods; it
not being uncommon to visit the
parastatal ZCBC stores only to find
entire shelves dominated by one,
often locally produced, jam, sugar or
brand of bread. Naturally, the status
quo created an environment where
demand far outstripped supply,
especially amongst the small but
comparatively wealthy middle-and
upper-income consumer groups.
Step in the entrepreneur
The supply vacuum of the 70s and
80s created favorable conditions
for risk-taking, often locally
resident, trader entrepreneurs.
These entrepreneurs would import
and distribute various FMCG
products in the Zambian market,
directly through owner-managed
“cash and carries” or in some
cases through parastatal stores
eager to expand their offerings but
being financially and otherwise
unable to do so themselves. These
trader entrepreneurs were able to
command such high gross profit
margins that the economic and other
risks they faced were all but justified.
Further, the supply vacuum and
almost unbelievable demand levels
for internationally sourced goods
rendered the trader entrepreneurs
immune to retailer demands which
are the norm in today’s FMCG
industry; allowing them to maintain
a positive bargaining power
position, to operate on minimal
cost structures and to achieve net
profitability levels that are today
unheard of at all levels of the FMCG
industry. Indeed, had a retail store at
that time asked a trader entrepreneur
to provide merchandizers or onerous
trade terms, the response would have,
at best, been a polite, “We will see”.
The evolution of Zambia’s FMCG story
the laissez-fair, low-investment, high-return
approach adopted by the pioneering trader
entrepreneurs is now well and truly dead.

20 21
being in turn replaced by a mainly
Asian-operated wholesale trade
(comprising of small, medium and
large wholesalers) and a retail trade
comprising of local independent
retailers (of varying sizes). For the
first time, by non-Zambian origin
corporate retailers such as Shoprite
(which opened its first store in
Lusaka in 1995) and entered the
market.
A similar fate awaited the parastatal
manufacturers of FMCG products
who were, (some might say
unceremoniously), privatized or
otherwise unbundled and replaced;
initially, through supply from
the nearby South African FMCG
industrial complex, from countries
further afield and by local private
industries manufacturing a range
of increasingly complex FMCG
products.
Finally, the trader entrepreneurs
who had up to now dominated
the FMCG industry were suddenly
faced both with new competitors,
an increasingly strong retailer and
wholesaler trade and demands from
international brands eager to take
their share of the growing Zambian
consumer market.
The late 90s to 2011
As recently as 2007, the low-income
consumer segment, the bulk of
the Zambian consumer market for
FMCG, was serviced primarily by
wholesalers, leaving the middle-
and upper-income segments to be
serviced by local independent and
international retail traders.
The retail sector in the period
leading up to 2011 was dominated
primarily by the Shoprite Group,
the Spar Group and the large
independents such as Melissa and
Embassy Supermarkets. Whilst
both the Shoprite and Spar Groups
sought to increase their national
footprint, the market penetration
strategy employed by the groups
remained distinctively different.
Shoprite promoting a centralized,
increasingly competitive pricing
strategy whilst The Spar Group
offered a hybrid corporate/
franchise variety and attempted
to achieve a more pleasurable
shopping experience. In turn,
large independents during this
period sought to consolidate and
retain their consumer markets by
providing a localized and a more
personalized shopping experience,
for example, assisting customers in
pushing shopping trolleys to and
loading their cars.
Wholesalers, seemingly insulated
from the attentions of the retail
trade, continued to operate on a
business-as-usual basis with a few
of the larger players (such as Mama
Africa in Kitwe and Zubair in
Lusaka) achieving mega wholesale
status; in some cases allowing them
to act as sub-distributors to smaller
wholesalers and the proverbial
“kantemba” (small street side vendor
stalls).
During this period, changes
were most obvious amongst the
manufacturers and distributors
supplying the retail and wholesale
trade. The virtual eradication
of the local parastatal FMCG
manufacturing base created
conditions ripe for South
African and other international
manufacturers to quickly move
in and capitalize on the resultant
shortages in supply, doing so
either through the existing trader-
entrepreneur operators and a
mushrooming number of new
distributors (both of Zambian
and foreign origin). Importantly,
the latter group of distributors,
especially those of foreign origin,
introduced to the market new
international standard distribution
concepts, including but not limited
to merchandizing, above/below
the line advertising, supply chain
management, brand exclusivities,
penetration (and promotional)
pricing strategies and extended
credit terms; effectively forcing the
older trader-entrepreneurs to either
adapt, die or exit the FMCG industry
for greener pastures elsewhere.
Simultaneously, the growing GDP
per capita towards the end of the
period and political pressures to
rejuvenate the local manufacturing
sector resulted in the establishment
of a number of local manufacturing
companies which, in their initial
stages, focused on the production
of low cost non-complex products
(such as simple biscuits or local
maize based drinks).
The post-2011 explosion
The meteoric rise in GDP per
capita, the ever-increasing number
of shopping mall complexes and
the increasing demand for quality
FMCG products were matched not
only by a comparative increase in the
number of Shoprite and Spar Stores
but also by the entry of new groups
such as Pick n Pay and Foodlovers
Market. Of course, the increased
number of stores and resultant
inter-group competition in the retail
trade created a highly competitive
environment characterized by more
competitive retail pricing, greater
variety of FMCGs, enhanced above/
below the line marketing and greater
foreign and local brand participation
in the market.
In turn, the greater number and
accessibility of modern group
stores and the significantly more
competitive pricing offered has
served to create intense competitive
pressures on both the large and
small independents operating within
retail. The former forced to respond
with competitive pricing strategies
of their own and the latter forced
to slowly transform themselves
into high frequency small volume
convenience outlets in order to
survive.
Interestingly, the same pressures
have also bled into the wholesale
trade which for the first time had
to contend with direct competition
from retail and especially the
group players therein; many such
wholesalers attempting to transform
themselves into retail outlets with
varying degrees of success.
In conclusion, the route to market
for FMCG is rapidly formalizing and
a wealthier, more knowledgeable
Zambian consumer has become ever
more demanding for quality, variety
and price competitiveness. In turn,
the growing bargaining power of
the groups (who themselves have
access to direct imports through
their various South African based
distribution centers) has resulted
in significantly increased pressures
on the operations of locally-based
distributors and manufacturers.
Both of whom have again had to up
their game.
This article was prepared by
Centurion Advisory Services Ltd,
a business and investor facilitation
and advisory company with
core competencies in the FMCG,
Hardware, Aviation and Service
industries.
Lusaka. Not so much in Kenya,
however, where the larger packaging
is still king. Business owners will tell
you how important it is to reduce
the sizing of packaging in African
markets to appeal to a consumer
with a lower income. As will many
research reports. However, local, on-
the-ground knowledge of the market
is essential. In Zambia, for example,
larger packaging for insecticide is
more popular as properties here
tend to be bigger.
“Consumer companies must become
aware of not only local product
preferences but also local buying
behaviors,” according to McKinsey
& Company’s Winning in Africa’s
consumer market publication
released in 2015. “In-country
teams, tasked with gathering
consumer insights and conducting
pilots and concept tests, are crucial
to consumer packaged goods
companies’ success in local markets.”
The article goes on to recommend
that potential investors should
learn and even partner with local
companies that have tailored their
offerings for their consumers.
No such thing as the ‘African consumer’
Author:
Staff Writer
“Potential investors
should learn and even
partner with local
companies that have
tailored their offerings
for the Zambian
consumer.”
Partnering with local businesses is
essential in tailoring your consumer
goods to the unique Zambian
market.
The Zambian consumer is unique to
his Kenyan, Malawian and Angolan
counterparts. And the rural Zambian
buyer differs from the urban buyer.
Potential investors into the hugely
punted ‘African Growth Story’
ignore the consumption differences
between countries at their own peril.
Eye-watering school fees have been
paid by retailers, distributors and
shopping centre developers who
approached the African opportunity
as one homogenous market.
Case in point: Kiwi shoe polish.
Professional, urban men in Zambia
tend to carry a small tin of Kiwi
on their person. Polished shoes
are valued here – thanks in part
to our cultural past, the hot and
dusty environment during much
of the year and the infrastructure.
The small packaging has seen
the product fly off the shelves of
Shoprite and Pick n Pay stores in
A snapshot of the Zambian
consumer:
So what does the Zambian consumer
look like? And what will she expect
from the retail industry in five years’
time? Industry interviews have
offered us the following snapshot:
The Zambian consumer is still
very price sensitive. Our Gross
National Income per capita is
low - $1680. The rural buyer,
especially, will tend to buy the
cheapest product available, despite
the brand. Urban consumers are
more brand aware – companies like
Nestle, Coca-Cola and Unilever
have been around for 20 years and
have earned considerable loyalty.
Many product categories get their
names from brands. For a while it
was enough to simply be here as a
brand thanks to a consumer that was
used to shortages and lack of variety.
But as competition in this arena
increases, your average Zambian
buyer will become more interested
in seeing a choice of brands on
the shelves. Zambia’s fortunes are
much determined by the copper
price, but allowing for the cyclical
nature of the commodity, it’s a fair
bet that the consumer here will
only get wealthier. It’s also expected
that formal retail will dominate the
shopping environment in urban
areas in five years’ time.
“The quick and easy money is over,”
says a distributor in Lusaka who
declined to be named.
Now investors need to focus on
long-term strategies, tailor-made
products and packaging for the
Zambian consumer, who has more
choice, and more information about
products, than ever.
“We’ve seen a major shift in
shopping habits in the last five
years,” says Mawano Kambeu,
founder of Dot Com Zambia, which
offers a shipping and also a shopping
service from international locations
– where 95% of the company’s sales
also had to be purchased by them
on behalf of the client, now it’s
almost half. “What this says is that
the consumer is getting a little more
educated and POS and credit and
debit cards are winning over mobile
money in their market segment.
Cards have given people access to
online shopping.”
“We’re seeing aspirational buys
but mostly it’s needs – laptops,
cellphones, books and clothes.
Smartphones are probably the
biggest thing we do,” he says.
Kambeu expects disposable income
to take a real knock following the
recent economic shocks, especially
as volatility and uncertainty persists.
Kukula Capital, a Zambian venture
capital investor, and eVentures
Africa Fund a Dutch venture capital
fund specializing in E-commerce in
Africa, recently invested $500 000 in
Dot Com Zambia.
Consumer TRENDS

Unit 30,
Arcades Shopping Centre
Great East Road
Unit 20,
Levy Business Park
Church Road
Unit 12,
Embassy Mall
Kafue Road
Contact:
+260 975 680 707
info@digiprint.co.zm

24 25
WE’VE GOT
THE SKILLS
One of the first questions that
potential investors ask when they
are considering setting up their retail
operations in Zambia is whether
they will be able to find the right
skills, the right people to employ.
The answer is a definite yes, the
skills are available in Zambia.
This is due in part to the growth
in the retail industry that has
allowed those already in the sector
to receive specialized training in
retail. The Zambian retail industry
has also seen an encouraging
incline towards giving greater
responsibilities and managerial roles
to local Zambians. But much more
can be done. Research will show
that the positions of the General
Manager and Finance Managers are
still in the hands of the investors
while we have seen only one large
supermarket retail store employ a
local Zambian as General Manager.
The retail industry in Zambia has
seen huge growth in the last ten
years; this growth has been brought
about by the fact that Government
has created an excellent investor
environment that allows more
entrants, both local and foreign, to
join the retail industry. It now enjoys
a working environment that has
seen less political interference in its
operations. The industry is not only
ripe for investment, but has started
to flourish.
The increase in the number of
upmarket shopping malls has also
allowed for better quality stores to
be opened in Zambia.
The salary scales that prevail in the
retail industry are pretty consistent
and uniform; it is this uniformity
that has slowed down the movement
of workers from one retail company
to another – a trend that concerned
investors a couple of years ago.
Employees these days will not be
able to get paid a salary that is too
different from what they would be
getting with their current employer.
It’s important for investors to realize
that all positions in the human
resource department can only be
held by a Zambian - this is law. The
retail industry is unionized and
it is therefore advisable that the
organization identifies and recruits a
human resource manager who is not
only familiar but has had extensive
experience in a work environment
that is unionized. What is key with
working with the unions is to have
a very good rapport with them and
keeping them updated with profits
being made by the organization.
That allows for reasonable demands
when it comes to the collective
bargaining process, as they will
have an idea of what the company
can afford to pay in terms of salary
adjustments.
Theft and pilferage contributes to
the biggest reason for employee
dismissals in the retail industry and
therefore any investor is advised
to have a strong security system
as well as possible internal whistle
blower policies. Some measures
that a company may take includes
outsourcing the security and stock
taking function as well as putting
performance related bonuses that are
paid out if recorded thefts are within
acceptable limits or eradicated. Also
advisable is that the recruitment
process is strict, that reference
checks, certificate, accreditation and
qualification verification policies
are implemented and adhered
to. This will help eliminate those
candidates with previous poor
performance or theft cases from
other retail organizations. The use
of aptitude tests and psychometric
tests can also be used to strengthen
the recruitment process and remove
all manner of subjectivity that may
occur during the interviewing
process.
The retail industry is not only
ripe for picking in Zambia; it is
flourishing. There is a huge pool
of human resource that is qualified
and well experienced to take on any
roles. We look forward to seeing
more Zambians being elevated
to the roles of General Manager
and Finance Manager in the retail
industry; the skills are there.
The author is an Entrepreneur, CEO
of Prosoft Human Resource Solutions,
Business Coach, Social Media
Marketing enthusiast and successful
Network Marketer.
www.miyandak.com
tel: +260979472850
miyanda@miyandak.com
Author:
Image by:
Miyanda Katiwa
www.miyandak.com
Managing human resource in the FMCG sector
Miyanda Katiwa
The food and beverage sector
has shown enormous growth in
Zambia over the past few years and
looks set to continue. When I first
arrived in Zambia, some time in
1999, there was only one shopping
mall, Manda Hill (prior to its most
recent upgrade), which had little
or no competition; Arcades not yet
having been completed at the time.
If we look around Zambia now, we
would be hard-pressed to think of
one of Zambia’s major towns which
does not have at least one of the
large supermarket chains. Many now
have three. This rise is due mainly to
the high rate of urbanisation and the
unprecedented rise of the previously
virtually non-existent middle class
across Sub-Saharan Africa.
Expenditure on food currently
dominates the expenditure budget
of most African families, but
this will change in line with the
expected rise in disposable incomes.
Consumption of staple foods will
undoubtably increase, but so will
spending on other goods, such as
meat and beverages.
So what does this mean and
how should insurance respond
to this foodscape ?
In the farming sector, research
and development will continue
to advance as we look to extract
more from less. This will mean
higher expenditure in areas such
as crop protection, IT, genetics,
biofuels, production techniques
and distribution. Similarly, a rise in
GM foods will in turn result in more
stringent labelling regulations, an
ever increasing litigation risk and an
increased demand for general and
tailored liability insurance policies.
In the case of food companies,
social media has become a major
advertising tool, again with major
consequences in the area of
advertising liability and product
recall – just ask VW.
IT will further integrate the various
stages of the food chain by tracking
progress from production through
to consumption and thereby
enhancing traceability. With this
enhanced traceability insurers will
then be able to offer more advanced
and tailored products such as crop
protection covers, loss of profits on
futures contracts and product recall
covers.
Indeed, traceability will
revolutionize the farming,
food production and insurance
industries. Tracking devices in
the past few years have evolved to
a point where they are now able
to assist industries not only to
monitor loads for the purposes of
Marine Transit insurance but also to
provide a much wider service which
speaks to the entire spectrum of risk
management and loss control. Let’s
face facts – if you can’t track it then
you can’t control it and if you can’t
control it then you can’t realistically
expect insurers to insure it without
pretty stiff premiums.
For indoor tracking, in a warehouse
for example, a simple Radio
Frequency Identification system
(RFID) may be sufficient.Where
an object needs to be tracked
outdoors and also within buildings,
combined RFID/GPS/Wireless and
Mobile Data tagging system can
be used. Individual bags of maize
or individual items on a pallet
can be tracked using a tiny tag the
size of an existing product label.
Vehicles can be monitored and set
to give alarms via SMS or email
should any number of variables
such as axle weight, time or speed
variables, or a pre-authorised route
be compromised; all of this being
viewable in real time, meaning it is
possible to have total overview of
product and distribution throughout
the chain from field or warehouse to
checkout. Essentially total inventory
management and asset tracking
capability.
What this means for insurance
purposes is that insurers have real
time capabilities – meaning they
themselves can track your product
How Big Brother
CAN REDUCE YOUR PREMIUMS
directly, respond directly to attempts
of theft by calling in police or
response units, immobilise vehicles
remotely, find lost assets and manage
documentation.
With existing technology all of this is
already possible, so you have to ask
yourself, where is your organisation
in this picture and how does your
insurance respond?
Sean Van der Maas is a broker
with SATIB Insurance Brokers and
stationed in Zambia. Van der Maas
previously worked in the insurance
industry in London before leaving
the UK and coming to Zambia to
start up a safari lodge. Van der
Maas opened SATIB Zambia in
January 2009. SATIB has offices in
5 Sub-Saharan African countries
and correspondent brokers in many
more and may be contacted on
+260 211 262 327 or
svandermaas@satib.com
Author:
Sean Van der Maas
If you can’t track it then you can’t control it and if you
can’t control it then you can’t realistically expect insurers
to insure it without pretty stiff premiums.
Tracking and insurance in FMCG

26 27
The last decade has seen strong economic growth in Zambia spurring a
growth in the middle income population. This has led to increased economic
activity and the demand for fast moving consumer goods (FMCG) has
soared. This demand is evidenced by the increased presence of shopping
malls in most of Zambia’s commercial, mining and trade centres.
The increased demand for FMCG has, as
expected, seen an increased presence in
the FMCG sector not only by local but also
international players. Notable players in
this sector include Trade Kings, Coca-Cola,
Procter & Gamble and Unilever. Leading
supermarkets such as Pick N Pay, Shoprite,
Game Stores and Spar also have presence
in the market.
At the core of the FMCG industry is the
concept of branding.
A brand identifies a product and differentiates it from its competitors.
Enormous value is placed on brands and this is evidenced by the massive
resources put into branding and marketing of various products.
The legal system in Zambia recognises the value of brands and makes
provision for the protection of intellectual property in such brands.
This articles focuses on trademark protection and briefly outlines what
protections are available to players in the FMCG industry in Zambia.
The law on trademarks in Zambia is primarily provided in the Trademarks
Act, Chapter 401 of the laws of Zambia (“Trademarks Act”). The following
discussion will highlight some of its features in relation to the protection
of brands.
What is protected?
The Trademarks Act protects ‘trademarks’ which refer to a mark used or
purported to be used in relation to goods for the purposes of indicating
a connection between the goods and some person having the right to use
the mark. A ‘mark’ is widely defined under the Trademark Act and thereby
extends protection to:
1) brands;
2) names;
3) labels; and
4) devices.
A holder of a brand can only obtain the protection offered under the
Trademarks Act once such brand is registered with the Patents and
Companies Registration Agency (“PACRA”). The brand will need to be
registered in relation to particular goods or classes of goods. The protection
offered is the exclusive right to use the trademark in Zambia in relation to
the goods for which the mark is registered. If a competitor or other person
uses the mark without authorisation from the registered owner, the holder’s
rights are infringed and a claim can be made against such competitor or
other persons.
Non-registration of brands on the other hand exposes investors to the risk of
not having their right of exclusive use protected by a claim for infringement.
This is illustrated in a Zambian Supreme Court decision involving D H
Brothers Industries (Pty) Limited v Olivine Industries Pty Limited 2012
Zambia Law Reports Vol. 7 at page 34. In this case, D H Brothers used
the trademark “Daily” in Zambia but did not register it. Olivine applied
for registration of the trademark “Daily” in respect of bleaching products
and other cosmetics. An opposition by D H Brothers to the application for
registration failed and this was upheld by the Supreme Court which held
that the Trademark Act does not offer any protection to an unregistered
trademark.
The FMCG industry is a competitive industry and key to being ahead of the
competition is having a distinct product with quality assurance. Branding
therefore takes a prominent role and the protection of such brands from
infringement and retaining the right to the exclusive use of the brand in
Zambia is paramount. This protection is afforded by registration under the
Trademark Act for the duration of the registration (seven years subject to
renewal).
Investors in this attractive sector in Zambia are invited to register their brands
and avoid the pitfalls of non-registration as evidenced in the DH Brothers
case. Some comfort can be had in the fact that non-registered brands may
be protected by the common law of passing off but its scope is not as wide as
that protected by the Trademark Act and most importantly, why take the risk?
Is your brand safe
IN ZAMBIA?
Ensure your brand is registered to protect it
“A holder of a brand can only obtain the protection offered
under the Trademarks Act once such brand is registered
with the Patents and Companies Registration Agency.”
Author:
Lusaka- based lawyer
The overall intent of the following tax incentives, rates and structures
governing the distribution of edible Fast Moving Consumer Goods (FMCGs)
to reduce the price of the goods to the ultimate consumer and promote entry
for more local manufactures into the sector. Here’s an overview:
• Reduced or no duties are applied on the importation of raw materials
required to produce FMCGs. This makes it possible to reduce the cost
of production of the said goods.
• Zero-rating is applied on selected FMCGs to enable manufacturers
and retailers to claim back Input Tax incurred in the production of
the goods, thus lowering the cost on both manufacturers, retailers and
ultimately the consumer.
• Exception from duties and labour related obligations in selected FMCG
industries.
• Deferred Tax is offered on selected equipment used in processing
FMCGs, upon application to the Commissioner General of the
Zambian Revenue Authority. This helps spread the tax cost for the
importers.
MANUFACTURING:
• The refund of Zambian VAT on the export of Zambian products by
non – resident businesses under the Commercial Exporters Scheme.
• A guaranteed input tax claim for two years prior to the commencement
of production.
• Favorable capital allowances: Capital allowances on industrial buildings
used for the purposes of manufacturing shall be entitled to a deduction
of 10% in case of low cost housing and 5% for other industrial buildings.
• Reduced duties on machinery and equipment used in the production
of FMCGs - persons who incur capital expenditure on an industrial
building are entitled to claim a deduction called Initial Allowance at
10% of the cost incurred in the charge year in which the industrial
building is first brought into use
• Any person who incurs capital expenditure on an industrial building
is entitled to an investment allowance at 10% of such expenditure in
the first year that the building is used for manufacturing purposes.
EXAMPLES OF SOME EDIBLE PRODUCTS.
• Import Duty on tapioca starch with dextrose powder which is used
in the manufacture of biscuits has been reduced to 15% - Reduced
import duty on inputs used in manufacturing certain products like
Crude Coconut (copra) oil at 5%
SNG Renco Associates is a Lusaka-based Accounting and Auditing firm.
To contact them email editor@centurionzambia.com
Zambia’s tax incentives
IN THE FMCG INDUSTRY
Author:
Renco Associates
Thinkstock
An outline

28
A day in the life of a small grocer
On the ground
It’s 04:45, still dark in Lusaka, when John Smith wakes up. He
needs to get to his small grocery to draw water. By 06:10 when
the rest of the city wakes and opens taps the water is gone, he
says. The tank of water he draws will go to cleaning his store,
the bathroom and for cooking in the grocery’s take-away which
he recently set up to get more feet through the store. It’s been a
tough couple of months for Smith. Stuck in a vicious cycle of low
sales and no access to financing, he can’t scrape enough money
together to pay his suppliers and stock his rapidly emptying
shelves. “Only the very basics sell now,” says Smith. “A year
ago we were filled to the rafters with goods, now we can only
stock what moves daily.” That means no chocolates, no specialist
goods, nothing special to make the small grocer the destination
store it needs to be to survive.
As the business opens at 07:00 the sound of the generator’s hum
fills the air. Since the city’s power crisis started Smith has spent
around K170 per day on fuel, no small amount for the business.
But, he says, the store’s troubles aren’t only water and electricity
problems, citing other challenges such as pilferage, poor or no
parking facilities for clients and the ever-increasing number of
hawkers who compete with him for the same clients; in some
cases from remarkably well-stocked temporary stalls situated
directly in front of his door.
Unfortunately, the headwinds faced by the store would escalate
into a full-blown storm. “I was born here and worked here all
my life, and I’ve never seen it (the country) so bad,” says Smith. Many of the
large distributors he depends on for stock have stopped selling to smaller
retailers on credit until the Dollar/Kwacha rate has stabilized, not knowing
which rate to use. Since the Kwacha’s rapid decline against the Dollar, there’s
been a sudden drop in the variety of goods available in small shops like this.
The alternative of paying cash on delivery is beyond Smith’s capabilities.
Further along the road from the grocer is Manda Hill – complete with
Shoprite and Game and loads of parking. Here at Smith’s shop, all the parking
spots are full and the smell of garbage fills the air. He complains about the
parking, but it’s the reason he doesn’t want his real name used. The second-
hand car salesman, who is using much of the parking bays for his business,
is a shady character. Smith blames the council for the general deterioration
of the area. Hawkers sit outside his store and sell vegetables. There’s a filled
garbage tip permanently stationed in the road. Meanwhile, the customers
with cars head past to Manda Hill, East Park Mall or Arcades. Listening to
hawkers and car guards commenting on your outfit is an unpleasant first
impression for anyone. The customers he gets are on foot, and ask for the
fat to be cut off of the meat so it can be cheaper.
Smith is stuck. Landlords in Lusaka charge in dollars. Another, better located
location for the store will cost around $3000 per month – an astronomical
amount for a small business earning in Kwacha. Getting finance from the
bank isn’t an option for small businesses either. The interest rates charged will
make your eyes water, while the only collateral the banks seem interested in is
Smith’s home; not an option for him and the family he battles to provide for.
At 19:00 he rushes the closing of the shop so that his staff can get home
before it’s too late. He goes to bed thinking about his creditors, and how
much money he owes them. All Smith can do is hope – hope it rains, that the
economy recovers and that his generator doesn’t pack up in the meantime.
Author:
Staff Writer
With unsurpassed expertise in providing permit processing and appeal solutions, Martreg Immigration Consultancy, supported
administratively by Centurion Advisory Services, gives you peace of mind when it comes to all your immigration related matters.
ANDREAS DAMALIS
+260 966 103 229
CHIMANGA SEAN CHUNGA
+260 973 545 367
cchunga@centurionzambia.com
For further information call Centurion Advisory Services on +211 250 278 or contact:
SERVICES INCLUDE
Compilation of Client provided documentation,
follow up and uplifting results.
Preparation of Application
Excludes review or preparation of client provided
documentation, excludes all legal work
Submission and follow up of Application forms
PERMITS INCLUDE
Residence Permit
Investors Permit
Investors Permit Renewal
Temporary Permit
All Immigration Department Searches
All Other Immigration applications, appeals,
reports or representations not mentioned.
Employment Permit
Employment Permit Renewal
Temporal Employment Permit
Study Permit
Spouse Permit
Spouse Permit Renewal
Temporary Permit Renewal

31
Business
COMMENTARY
David, Goliath and the cost of capital
Author:
Sipho Phiri
Zambia had a thriving local retail
culture at independence and
saw the rise of local corporate
supermarket chains, namely
Mwaiseni Stores, ZOK and
ZCBC. These stores thrived, had
a countrywide presence and even
introduced elevators in their
flagship stores. Mwaiseni, before its
nationalisation, was run by Henry
Susman and owned by Zambian
businessmen, Andrew Sardanis and
Henry Shikopa. Susman was part of
the world-famous retail family who
owned Woolworths in South Africa
and Marks & Spencer in the UK.
These stores gradually closed down
after the depression of the late 80s
and the inefficiency of its state-run
management.
Along came privatisation and a
floundering South African chain
of stores took the risk, along with
massive tax and importation
incentives, to purchase some of
the anchor stores being privatised.
Shoprite thrived and quickly
became the dominant supermarket
in Zambia and the darling of
Zambia’s deprived consumer.
Zambians were reminded of days
gone by when we could actually
purchase complete baskets in a
single shop and not have to ‘make
a plan’ for a significant portion of
our needs. Shoprite had the benefit
of a new, completely liberalised
exchange rate and with it, the ability
to import anything from tomatoes
to caviar.
Shoprite’s success became the stuff
of folklore when describing the
benefits of expanding ‘into Africa’
as South Africans somewhat oddly
describeit.Subsequentcompetition,
albeit belatedly, began to enter the
market and today several foreign
fast moving consumer goods
retailers have entered the market
chasing the cash-rich Zambian
consumer. These include the giant
of all retailers, Walmart, through
its acquisition of Massmart (which
owns Game Stores and Builders
Warehouse). There are plans afoot
for large European retailers to enter
the market and a recent aggressive
entry by Botswana-based retailer,
Choppies. The fact that these stores
are foreign-owned should not, and I
believe, is not, of great concern. In
effect, it brings a wider choice to the
consumer and promotes efficiencies
and improved trading environments
for Zambia’s consumer, although
more could be done to take these
stores to the people in the higher
density suburbs of Zambia as
opposed to shiny ‘bling bling’ malls.
“Zambians have begun to
become more conscious of
the fact that comparatively
few products in foreign-
owned corporate retail
stores are of Zambian
origin.”
“There is need to rapidly
and dramatically increase
Zambian participation.”
The issue is the impact that foreign-
owned corporate retailers have
on the Zambian economy and the
percentage of Zambian products on
their shelves. Zambians have begun
to become more conscious of the
fact that comparatively few products
in foreign-owned corporate retail
stores are of Zambian origin,
despite the public statements made
by the retailers that they want more
Zambian products. This has led to
a gradual questioning of the wider
economic benefits of these stores,
accusations that they are taking
business away from Zambians
and that they are not supporting
local suppliers. This in turn leads
Zambians into the worldwide
argument concerning megastores
and whether their impact is positive
or negative. On the retailers’ side,
it can be argued that bringing in
competitively priced high-quality
products is for the benefit of the
consumer and the money they save
through pricing and convenience
outweighs the negative impact on
the small retailer and marketeer.
On the other hand, the drain
on foreign exchange to fill these
stores with, for example, imported
potatoes (when the retailer is in
the middle of Africa’s most fertile
land), becomes more questionable.
Either argument notwithstanding,
it is clear to all that there is need to
rapidly and dramatically increase
Zambian participation.
There is primarily one reason that
foreign retailers and suppliers
of goods are more competitively
priced than their Zambian
counterparts: the cost of capital and
access to capital, which cripples any
meaningful Zambian participation.
Without anything being done to
balance the playing field, Zambian
retailers are simply not able to
compete and the market will
continue being dominated by large
foreign retailers.
Foreign banks lend at massively
discounted rates to multinational
retailers and suppliers off the
back of huge balance sheets and
parent company guarantees.
Retail property developers in
Zambia utilise the multinationals
to secure funding for their malls
and commercial properties (giving
the multinationals massive anchor
tenant discounts without which
their funding would be unavailable
or extremely expensive). Foreign
origin goods suppliers extend long
credit terms to the multinationals in
order to get volume sales. Zambian
suppliers and retailers, especially
the smaller ‘corner store’ retailer
or medium-sized supplier, are not
able to command the same supplier
credit terms and are forced to fund
their working capital in order to
provide the ‘supplier credit’, with
very expensive money; north of
20%.
There are several interventions
necessary from both the
Government and the retailers to
address these issues. On the surface
of it, there appears to be solutions
that are surprisingly simple and that
are oft-discussed. One would be to
reduce government borrowing on
the local market, thereby freeing
capital and stimulating the banks
to lend more competitively to local
businesses, suppliers, developers
and retailers. In addition, the
retailer who consciously supports
the participation of Zambian
suppliers, especially of agricultural
produce, will see a surge of
goodwill and increased support
from the Zambian consumer. In
the meantime, competition will
no doubt continue to flourish and
the corporate retailers will have to
move toward the higher density
areas and improve the shopping
experience of the majority of our
urban populations.
Sipho Phiri, a banker by profession,
left the consulting and finance
world in 2006 to pursue his own
business interests. Phiri is a serial
entrepreneur with vested interests
across multiple industries. Phiri is
currently the Honorary Consul for
the Kingdom of Denmark to Zambia.

32
It’s not a glamorous life, insists
Monica Musonda, the entrepreneur
behind Java Foods and eeZee
Noodles. “I used to be a lawyer
and wear expensive clothes, I
drive a truck now!” Looks can be
deceiving then, as the captivating
businesswoman meets with me at
her warehouse in Lusaka. Named as
one of the Forbes 20 Young Power
Women in Africa 2013, Musonda
is one of the better-known faces of
Zambian entrepreneurship thanks to
her media savvy and determination
to use local products in her fortified
foods business. All in all, she makes
it look easy. And glamorous. It’s
anything but. As the city’s crippling
electricity crisis continues the drone
of generators fill the air during our
interview.
Musonda left a successful career as
a lawyer for the Dangote group to
return to her home and start Java
Foods. “I was slaving as a lawyer,
and enjoying it less as my stress
levels were crazy. I made a lot of
money, but the life became about
material goods. I just felt I was
missing something, I just felt I could
impact Zambia. I didn’t know what
that would be, I didn’t know it would
be this.”
She watched and learned from
Aliko Dangote, Africa’s wealthiest
businessman and founder and CEO
of Dangote Cement. Musonda kept
her eyes peeled for an industry to
invest in that was still uncompetitive.
Realising that the only product made
locally from wheat was bread, she
grabbed the opportunity to produce
noodles. Her primary Southern
African competitor is Maggi, most
other noodle brands are imported
from Asia. She used her own savings
and loans from friends and family to
fund Java Foods and the group’s first
food, eeZee Noodles was born.
It was a slow start for Java Foods
and the first year of eeZee
Noodles’ existence was tough. The
business spent a lot of time and
money on marketing and cooking
demonstrations. “People couldn’t
say it never mind make noodles.
Supermarkets wouldn’t stock it and
we had issues like stock expiring in
the warehouse. I was a little naïve
in thinking everyone knew what it
was.”
The business has spent the last
two years hard at work creating
and promoting a strong brand and
will be launching a fortified cereal
aimed at the mass market pending
certification.
“We’ve worked really hard on the
brand. We’re launching eeZee
Super Cereals soon. We wanted to
add another product range while
the noodles are still growing. The
fortified cereal is made from local
products and we spent on packaging,
because we’re the new kids on the
block in this category,” she says.
Despite the economic hit Zambia
is taking at the moment, Musonda
believes the formalization of the
retail industry is a no-brainer.
“People need to eat, and they’re
looking for something convenient
and well-priced. Retail will continue
to grow.”
Musonda is the quintessential
entrepreneur, seeing opportunities
everywhere. During our interview
she mentioned numerous business
ideas she’s thought of that would
address local needs – from the food
industry to starching white shirts for
the lawyers of Lusaka. Her passion
is well communicated and it’s easy
to see why she’s a regular feature
on the conference speaking circuit
– she seems ready to grab the first
person she meets on the street and
prop him behind a lemonade stand.
“We have to take ownership of this
place. Are we going to be spectators
or participants in the growth of this
country?”
“I tell people: ‘Look around you,
look at what people need’,” she says.
On her extensive media coverage
and fame in the local business
community she says “sometimes
it’s about raising your hand for one
thing that then leads to another. I
speak at a lot of conferences now
and this has all happened in the
last two years. I say to Zambians,
put your hand up, even if you don’t
know anything about it, go do some
research and do your best, because it
leads to something else.”
According to Musonda, investors
need to really understand the
cost of doing business in Zambia.
“You’re not going to learn about the
distribution sector of Zambia from
a book, you need local partners to
understand how it functions.”
Despite the tough economic
environment, Musonda is still
excited as anything about doing
business. She’s positive they can
survive the tough times. There’s
a huge Shoprite opening near
Musonda’s warehouse. Choppies is
aggressively entering the market.
“These big supermarkets are seeing
the growth potential of formalized
shopping in the Zambian market,”
she says. And so is she. The future
looks rosy for Musonda.
Profile:
MONICA MUSONDA
If it was eeZee, everyone would do it
Author:
Staff Writer
Image by:
Enoch Kavindele Jnr.
Axis Advisory Limited is the company for all your corporate service needs.
We are a team of experts with a client base of both local and off shore clients
in the following:
Our work incorporates an element of expertise and skill with a professional touch
in what we do.Axis Advisory Limited has a well established background with its
strong links to Musa Dudhia &Co.
Contact details:
Company Secretarial Services
Local Company Incorporation
Documentary Agent Services
Foreign Company Incorporation
Trade Mark Registrations
Tax Registrations
National Pension Scheme Authority Registrations
Business Permit Applicatins
Workman’s Compensation Fund Registrations
Application for Business Name
Trading Licences
Transfer of Shares
+ 260 211 250 713 / 250 714
+ 260 211 211 253 831
info@axisadvisory.co
www.axisadvisory.co

Michelangelo Lodge and Restaurant is family owned and managed.
It is situated along Broadway Avenue, only 5 minutes drive from Ndola International Airport
and set in the heart of Copperbelt’s friendly city.
Coupled with classical artwork, Michelangelo inspired decor and design and traditional Tuscan ambience,
the lodge and restaurant offer the nostalgia and feeling of traditional Italian cuisine and hospitality.
Michelangelo Offers:
• 30 Beautiful, air conditioned rooms all ensuite with bath and shower, mini
bar, in room tea and coffee facilities, plasma screen DSTV, wireless internet
connectivity, hair dryer, electronic mini safe and laundry service.
• Two sparkling clear swimming pools.
• The Michelangelo restaurant offering authentic Italian Cuisine as well
as traditional Zambian and International dishes paired with wines from a
carefully chosen list, delectable desserts, cakes and home-made ice cream.
• A fully licensed bar.
• Therapeutic Reflexology by appointment only.
Contact Us:
Michelangelo Lodge and Restaurant
126 Broadway Ave,
P.O. Box 70447,
Ndola, Zambia
Tel: +260 964 386 294 | +260 212 620 325 / 620 476
Fax: +260 212 620 326
Email: michelangelo@m-angelo.com
Experience hospitality at Ndola’s premier boutique property!
MICHELANGELO
LU X U RY A C C O M M O DAT I O N
NOTAJOBTOSNIFFAT
Tourism is regarded as a major
contributor to Zambia’s economy.
With a staggering 20 national
parks set aside as protected areas,
including the renowned South
Luangwa National Park, tourism in
Zambia is well placed to become one
of the top economic drivers.
However, like the rest of the
continent, elephant poaching and
trafficking of a multitude of wildlife
products is increasing and threatens
the same wildlife populations on
which this booming economy is
built. To try and combat this, the
South Luangwa Conservation
Society, in partnership with the
Zambia Wildlife Authority, have
implemented Zambia’s first sniffer
dog unit in South Luangwa.
Zambia’s first conservation sniffer dog unit
Advertorial
Author:
BrandLine Distributors
Highly trained and specialized
dogs are now being used to sniff
out traffickers moving illegal
products such as ivory, bush meat,
pangolin scales and carnivore
skins. The programme has been
running for a year and already a
number of illegal firearms have
been removed from the system,
ivory and bush meat located and
confiscated and the perpetrators
brought to book. Professional
sniffer dogs need specialized food
for optimum performance. Our
canine combatants don’t have to
sniff further – ROYAL CANIN
and BrandLine Distributors from
Lusaka are their official supporters
and sponsors.
Thinkstock

38 39
NeedtogetyourgoodsontoZambianshelves?
The Concept
To foreign manufacturers and
suppliers of FMCG: before you
invest in Zambia, consider the
following concept. It could save you
much time and money.
recently started a feasibility study
for the creation of an integrated
warehousing, distribution, sales and
merchandizing outsource solution.
The business concept studied allows
foreign manufacturers and suppliers
of FMCG to incorporate their own
subsidiary companies in Zambia to
which they can send stock that is in
turn warehoused, distributed, sold
and merchandized in-country by
a single Zambian Service Provider
equipped and staffed for such
purpose. Essentially a ‘walls and
wheels’ outsourced solution with
the additional services of sales and
merchandizing.
Aim of concept
What this concept aims to do
is to address the most common
stumbling blocks faced by foreign
manufacturers and suppliers
who, until now, have normally
accessed the Zambian market
through appointed distribution
agents or their own established in-
country operations. Here are the
disadvantages associated with the
above approaches.
• WHEN
USING DISTRIBUTION
AGENTS:
Lower gross profits thanks to the
often high (and usually unclear)
distributor’s middleman margin,
resulting in higher than optimal
pricing of the products with a direct
impact on volumes sold.
Centurion Advisory Services proposes a hybrid approach:
• By removing financing costs
associated to the purchasing
of goods, the service provider
is able to charge you a pure
transparent service fee, which,
ideally, should be variable and/
or success-based (for example
by charging as a percentage of
goods sold or distributed).
Substantial credit risk exposure
as the foreign manufacturer or
supplier often extends unsecured
cross-border credit lines to a single
(or few) appointed in-country
distributors. The result? Lost sales
opportunities due to stock level
constraints.
• Ownership of the products
sent to Zambia remain, (until
such time as they are sold to
the retailer or wholesaler),
with your Zambian subsidiary.
As a result you’re able to hold
higher in-country stock levels
and avoid leaving ‘money on
the table’ as a result of lost sales
due to distributor credit limit
constraints.
• By supplying (through
your Zambian subsidiary)
multiple retail and wholesale
customers, you’re ultimately
able to distribute the credit risk
exposure.
Dilution of your marketing strategy
because of poor or partial in-
country implementation by the
distributor.
• Execution of the in-country
brand marketing strategy
remains in the hands of your
Zambian subsidiary.
• THE DIY APPROACH:
Often high ‘school fees’ are incurred
in the set-up stage of your in-
country operations;
• The concept proposal is based
on absolute guarantees to
the foreign manufacturer or
supplier and its Zambian
subsidiary. For example,
unjustifiable stock loss risks
whilst in the possession of the
service provider are mitigated
by both locally taken stock cover
insurances and deduction of
service provider fees. Similarly,
inefficiency and poor execution
risks (for example in sales) are
mitigated by a success-based
service fee structure.
Slower market penetration of your
brands as a result of initially weak
local market knowledge and weak
trade relationships with key retail
and wholesale customers;
• The concept proposal is based
on the premise that the service
provider will employ a team of
local sales and merchandizing
professionals with established
trade relations and local know-
how; allowing for faster market
penetration of the products
and live, updated information
on pricing and competitive
pressures.
High operational costs incurred
as a result of employing multiple
expatriates in the set-up stage of
your in-country operations.
• The concept proposal removes
the need of the Zambian
subsidiary to employ expatriate
warehousing, logistics, sales
and merchandizing managers;
these being instead provided by
the service provider. As a result,
your Zambian subsidiary, if
required, need only employ
expatriate employees in the
General Manager, Finance
Manager and Administration
Manager positions; thereby
reducing the high overhead
costs associated to employing
multiple expatriates.
Is this concept for you?
The Concept Proposal is
best targeted towards small-
and medium-sized foreign
manufacturers of FMCG interested
in expanding into the Zambian
market but who are unable to
establish and fund their own in-
country operations. Similarly, large
sized manufacturers would also
benefit from the cost efficiencies and
risk-mitigating factors of the service,
especially in the start-up stages
of their entry into the Zambian
market. All sized manufacturers
would undoubtedly benefit from the
local know-how of an experienced
Zambian service provider.
Learn More
All parties interested in learning
more about this proposal are invited
to contact Centurion on any of the
below contact details:
Andreas Savva Damalis
General Manager
+260 211 250 278
+260 966 103 229
Advertorial
Author:
NEED A DISTRIBUTION
SOLUTION IN ZAMBIA?
CENTURION ADVISORY SERVICES’
SOLUTION: A HYBRID MODEL
CURRENT OPTIONS
EMPLOY A ZAMBIAN DISTRIBUTOR
LOCAL KNOW-
HOW
QUICKER MARKET
ACCESS
MINIMIZED
‘SCHOOL FEES’
LOWER GROSS
PROFIT
SINGLE SOURCE
CROSS-BORDER
CREDIT RISK
BRAND STRATEGY
NOT YOURS
DO IT YOURSELF
HIGHER GROSS
PROFIT
CONTROL BRAND
STRATEGY
HIGH ‘SCHOOL
FEES’
EXPENSIVE EXPAT
EMPLOYEE START-
UP COSTS
CREATE A NEW ENTITY IN
ZAMBIA AS A SUBSIDIARY
WAREHOUSING, NATIONAL
DISTRIBUTION,SUCCESS-BASED
SALES, MERCHANDISING,
OFFICE SPACE
CONTRACT A ZAMBIAN
DISTRIBUTOR FOR:
MANAGERS FOR FINANCE,
ADMINISTRATION AND HR
SUBSIDIARY
EMPLOYS OWN:
PROS:
• RETAIN STOCK OWNERSHIP
• ELIMINATE STOCK LOSS RISK
• OPTIMIZATION OF WAREHOUSING AND DELIVERY COSTS
• INCENTIVIZED SALES AND MERCHANDISING

GET YOUR BUSINESS
To advertise in the next issue of
Centurion Business Review
NOTICED
contact:
Andreas Damalis:
+260966103229
Chimanga Sean Chunga:
+260973545367
T’s and C’s apply.
Deadline for submissions for Issue 2 is 29 February, 2016
BY DECISION-MAKERS IN ZAMBIA,
SOUTH AFRICA AND THE GCC STATES
Issue 01. January - February 2016
The FMCG Issue: FMCG in Zambia:Still the next big thing.
How to get your productonto shelves in Zambia.
A frank interview with Hon.Minister Given Lubinda.
Is your brand safe inZambia?
Lifestyle: Lusaka’s gatedcommunity.
Gethookedonourgreatqualityproducts
andcompetitiveprices!
Unit 6
Petroda Filling Station
Leopards Hill Rd
Lusaka
Tel: +260 976 760 320
Email: staceygloriafab@yahoo.com
Reels | Rods | Baits | Line & Leaders
Terminal Tackle | Apparel | Tools & Accesories
Established in 2006, the fund has held
fundraising events and solicits donations
from its founders and members of the
general public.
It has undertaken various projects like
contributing to diagnostic and care
costs incurred by sick children whose
TO GET INVOLVED, CONTACT:
MARIA DAMALIS
Tel: +260 977 355 345
email: maria@glittersparkle.net
families have limited financial resources.
The fund also supported the rehabilitation
of children’s cancer care units in public
health institutions. We would like to invite all
able members of the public to get involved
in supporting this worthy initiative, both
directly or if preferred, through the Fund’s
activities.

Business Review_Issue 1_softcopy

Business Review_Issue 1_softcopy

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Business Review_Issue 1_softcopy

Ähnlich wie Business Review_Issue 1_softcopy (20)

Business Review_Issue 1_softcopy