New Industries Boost Local Production (The Africa Report n°30 – May 2011)

Egyptian businessman Ahmed El Sewedy sees both the positive and negative in Zambia’s landlocked predicament. « For our goods to reach [Zambia] it takes two months. But if you manufacture here you can supply in less than one week. » Elsewedy Electric Zambia has invested $20m in a transformer factory at Ndola in the Copperbelt and will invest another $200m in the next two years under a contract to supply transmission lines and substations to state utility ZESCO. There is enough demand to sell 80% of the transformers on the local market, but Elsewedy is already exporting to the DR Congo and Mozambique and looking to expand. « What we are seeing is a replacement of the sunset industries, » explains Trade and Industry Minister Felix Mutati. « You had this cluster of manufacturing companies that have not updated their technology or their management structures and have got weak capital structures, so they have not been able to survive the competition. » Now a new crop of industries is taking advantage of the mining boom. In January, Japan’s Hitachi announced it would set up a $10m manufacturing plant on the Copperbelt to service its mining machinery used in the region. The government also hopes to kick-start the local pharmaceutical industry, which collapsed under pressure from cheap imports when the market was liberalised too quickly. Local share of the drug supply has fallen from 40% to 10% in the past five years. Certain drugs will now face import duties in an effort to revive the industry.

G.W.

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