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Bursting at the seams

| June 3, 2011

Hey, big spender

To appreciate the shift that has taken place in the Zimbabwean tobacco industry over the past decade, consider these figures: In 2000, approximately 4,000 growers sold 240 million kg. This year, the Zimbabwe Tobacco Association is expecting sales of about 160 million kg—produced by a whopping 60,000 farmers.

Designed for commercial production, the country’s marketing infrastructure is bursting at the seams. Whereas in the past a single farmer might deliver 100 bales, now hundreds of farmers will queue up to deliver three or five bales each.

And the farmers don’t come by themselves. Often, they are accompanied not only by family members but also by creditors who hope to collect before the farmer spends his paycheck.

In May, the line of tobacco growers and their entourage at the Tobacco Sales Floors stretched for five kilometers, according to a leaf merchants whose offices overlook the auction.

The presence of so many people with fresh cash in their pockets, in turn, has attracted others hoping to sell to them their goods and services. Makeshift marketplaces have sprung up around all three tobacco auctions in Harare, offering everything from tractors to telephone cards.

Some are even more ambitious. I had dinner last night with Temba Mliswa—an interesting character worth Googling—who wants to open a fourth tobacco auction near the Boka floor. He’s already filed an application with the Tobacco Marketing and Industry Board. While not everybody in the trade believes expanding capacity is the way to go—some prefer optimizing operations at the existing facilities—Mliswa’s plans underscore the extent of the changes taking place in Zimbabwe.

Approaching TSF

| June 2, 2011

Going, going, gone

| June 2, 2011

Auctioning of leaf at the Tobacco Sales Floors in Harare this morning

Peaceful rise

| June 2, 2011

Zhang Qinggang and an unidentified visitor. The characters in the background mean "harmony," I think.

I was surprised to run into Patrick Rose at Northern Tobacco in Harare. I had met Patrick several years ago when he was looking after BAT’s leaf growing operations in Uganda, and he seemed to enjoy being back in his home country.

Later that morning, I caught up with Zhang Qinggang, managing director of Tianze Tobacco, a subsidiary of the China National Tobacco Corp. The Chinese have become a significant player in Zimbabwe lately, at times purchasing up to 40 percent of the crop.

Like other manufacturers, CNTC has become concerned about security of supply in recent years. In April 2005, it established Tianze. Today the company contracts with 170 farmers (both small-scale and commercial) and also purchases at auction.

Echoing concerns in some parts of the world about China’s rise as an economic superpower, some in Zimbabwe have expressed discomfort with the growing Chinese role in the leaf tobacco sector.

Zhang was keen to stress that Tianze was not “taking over” Zimbabwe’s tobacco business. “We want to support the industry, play by the rules and contribute to healthy market conditions,” he said, adding that up to 98 percent of the company’s employees were local.

Whirlwind

| June 1, 2011

Dr. Andrew Matibiri, the late Roger Boka and his daughter, Rudo Boka

I visited the Tobacco Sales Floors this morning, interviewed Greg McDonald at Inter-Continental Leaf and caught up with Dr. Andrew Matibiri at the Tobacco Industry and Marketing Board, who introduced me to Rudo Boka.

Rudo is the daughter of the late Roger Boka, a controversial black-empowerment entrepreneur who in the 1990s built what was supposed to become the world’s largest tobacco auction facility in Harare. Eager to service the tens of thousands of “new” small-scale growers, the Boka family has recently taken control of the facility again and is now working feverishly to put into place the infrastructure required to cope with such numbers.

I then had lunch with Adam Molai, chief executive of Savannah Tobacco Co. Savannah has grown considerably since I last visited the company and is now housed in the former Burley sales floor.

In the late afternoon, I visited Dr. Dahlia Garwe, assistant general manager of the famous Kutsaga tobacco research station. We spoke about the rise of small-scale farming at the expense of commercial growing and how Kutsaga had adjusted its programs in response to the new realities.

My head is now spinning with new impressions and insights. But rather than trying to make sense of them this evening, I think I’ll have a beer with my eclectic lodge mates instead.

Fresh deliveries

Dutch treat

| May 31, 2011

“The devil shits Dutchmen,” complained Sir William Batten in 1667 as he watched the English fleet burning in the Thames estuary.

The famous British naval administrator was exasperated by Dutch challenges to English rule in the east Indies, on the high seas, and now even at home.

While few would accuse the Netherlands of having an overly aggressive foreign policy today, at least part of Sir Batten’s observation continues to hold true—the Dutch are everywhere.

A new contingent of guests arrived today at York Lodge. While not all proper Dutchmen, five of my seven fellow diners were Dutch speakers—two government officials from The Hague, the Belgian diamond trader who also joined us yesterday, an American teacher who has lived in Antwerp for nine years, and an Afrikaner.

Unsurprisingly, dinner conversation focused on the idiosyncrasies of the various Dutch dialects.

The only internationally recognized Dutch word, of course, is apartheid. But none of us felt inclined to bring this to the attention of our non-Dutch-speaking table mates.