By Richard Chirombo
Malawi is missing out on existing foreign market opportunities for fruit exports due to glaring inadequacies in raw materials supply, high costs of production and lack of rebates to encourage exports and improve competitiveness among Malawian suppliers, challenges Dairibord Malawi Limited, one of the country’s leading fresh and dairy products manufacturers, says have forced it to refuse large export orders.
Seasonality of most Malawian fresh products, such as tomatoes, jam, and pineapples is one the biggest challenges facing the tinned products industry, and is said to be one the driving factors behind government’s adoption of the One Village One Product (Ovop) concept from Japan as it strives to empower farmers in advanced fruit preservation technologies.
Dairibord Malawi Managing Director, Theodora Nyamandi, said through a written response to a questionnaire the country had the potential to turn fruit products into one of leading export products to supplement other established foreign exchange earners such as tobacco, tea, cashew nuts (where Malawi has established herself to be one of the leading exporters.
Nyamandi said the supply side inadequacies, lack of rebates and long term concessions for farmers wishing to venture into long term fruit tree cultivation had translated into a relatively small domestic market thus increasing costs of production due to low economies of scale.
“ (However) some products such as jams and tomato products have done very well (that) Mulanje Peak Foods – a subsidiary of Dairibord- Mixed Fruit Jam and Tomato Puree have attained leadership status in their domestic market segments although their market share is still below 50 per cent,” said Nyamandi.
According to Nyamandi, efforts aimed at drumming up the support of local consumers were hampered by high unit costs of production leading to uncompetitive pricing of products, a development that meant most products being perched beyond the buying power of most consumers.
Drastic improvements in the raw material supply chain were needed to enable production of large consignments of canned products, she said, adding this was be the prerequisite towards meeting the huge foreign orders of local products. Currently, Dairibord was eying the regional export market in a bid to widen its market base.
Despite all this, we have managed to “improve livelihoods for more than 300 farmers who supply fruit and vegetables, implying that employment for at least 1000 people was created at farm level with prospects for growth. We have also created down stream employment for sellers and marketers of finished goods, while creating markets for package manufacturers. Advertisers, telecommunications”.
The company currently exports tinned foods to Mozambique and Zimbabwe earning the country the much needed foreign exchange, but Nyamandi said the country could exploit more opportunities for exports if there were more deliberate policies on part of policy makers to create long term financing to suppliers at concessionary rates for agricultural projects with more gestation periods.
She said, for instance, that growing some fruit trees could take as long as 3 to 5 years before harvesting of the first fruits, processes that act as disincentives to farmers wishing to invest in cultivating long maturing fruit trees like mangoes and oranges, let alone produce the adequate volumes required to satisfy market demand.
To come around this problem, the company was working hand in hand with government in offering technical and financial assistance to enable farmers increase productivity.
“We have the potential to do better at the international market and help raise employment prospects and the economic status of our people,” she said.
Industry and Trade Minister, Henry Mussa, said government was committed to help local industries come over supply side challenges in a bid to raise the country’s export profile.
Mussa said his ministry would continue to engage industry players on how to improve the playing ground and attract increased supply side investment, saying that was the only way the country could diversify its range of export products.