TOBACCO Industry and Marketing Board (TIMB) chief executive officer Andrew Matibiri (AM) is approaching the end of his tenure in April 2021. This ends a 10-year reign at the board. Our business reporter Fidelity Mhlanga (FM) speaks to him to get insights on his journey. Below are the interview excerpts;
FM: Tell us about your experiences at TIMB
AM: The experience has been very good. It has put me at a certain level, now I understand things that are higher, at a much higher level than before. The tobacco industry, by its nature, is very important. It’s important in terms of foreign currency generation and the employment it creates. And obviously, when I joined the industry, it was at a crucial time, that was at the height of the land reform programme.
FM: How many people are employed in this sector?
AM: About 60 000 people were directly involved in the production.
If you take those as being members of families or heads of families, and you can multiply that figure, again, by at least two, or three.
So again, you know, you are now talking about maybe a million people involved or dependent directly on the production of the crop. Further down the line, maybe even more people.
FM: What are the lessons you have learned over the years?
AM: The biggest lesson that I learnt is that farmers are not dull. They are intelligent people. They make very clever decisions.
FM: There are concerns by farmers of collusion and price manipulation. What is your comment?
AM: That one is always difficult to investigate and prove. One of the things that the board did was to remove the operations of the so-called B class buyers. They were not adding any value to anything.
FM: What is being done to improve the bid to make sure that it becomes 100% automated?
AM: We are looking at various systems where the process can be automated. In other words, when a bidder punches in the price, the system immediately informs the bidder that the price is within the range and everything is okay than having to start the whole process.
Now, that was the start; it didn’t put a starting price so you start over again. Something like that.
That’s where the glitch is just slow in terms of restarting the process when the bids are below the starting price.
FM: In terms of the e-system, which company is providing the assistance and at what cost?
AM: The software was developed in India but it has been adapted by local IT people. As for the actual cost, it was not very much; we are talking about licencing fees, basically. We have come off the licencing fee because we are not maintaining it. We have received invitations from neighbouring countries to set up similar systems for their tobacco. Unfortunately due to Covid-19 travel bans we have not been able to take up the opportunity.
FM: What is the country’s capacity for value addition?
AM: Our capacity at the moment is difficult to say because Zimbabwe tobacco is used for blending.
The figures that come from China indicate they only use 5% Zimbabwean tobacco, and 95% of their own local tobacco, which lacks flavour or aroma and the blending gives the cigarette its full flavour. If we are to add value, it means that we would have to bring in a lot of tobacco; much more than we produce to make cigarettes before exporting. The potential is there.
FM: Do local manufacturing companies blend with other tobacco providers?
AM: Even with the local cigarettes you will be hard pressed to find more than 20-25% of local tobacco. Much input comes from India, the Philippines and other places.
FM: What percentage of output is being value added?
AM: At the moment it’s around 1% into cigarettes. You know, the Zimbabwean situation is very unique. Our population is 15 million, and 70% of people live in rural areas. They don’t really buy cigarettes from a shop or a taxable formal market. They roll their own if they smoke. Men nowadays don’t smoke; only about one in 10 do. Yeah, so the market is very, very low. For example, compared with other countries like our competitor, Brazil, they produce 660 million kg. They use locally produced tobacco to support their population. India produces 880 million kg.
FM: Apart from blending and producing cigarettes, what are the other uses of tobacco?
AM: At the moment, there is no other use. Research is being done to look for alternative uses of tobacco.
FM: Some are using the tobacco debris for manure. They say it’s nutritious for grass or lawn. Is it something we can leverage on?
AM: Yeah, that’s one use and another is small pellets, which can be put into machinery, spread in fields, and so on. There are also people who are looking at trying to extract certain minerals from the waste and production of skin lotions. That’s being done in Europe.
FM: There are concerns that tobacco is being funded through international contracting companies which then deduct their money and leave farmers with insignificant profits. What’s your take?
AM: I do want to go back to a situation that prevailed 20 or so years ago. Support for production must come from our local financial institutions. This is why we are concerned that the current situation is leading to the demise of the tobacco auctioning system, which is the fairest way of selling tobacco.
The contracting system is a bit closed. Farmers are given inputs and the contractor determines the price of the product.
So if we can get back to a situation where funding, local funding is available for farmers and there are issues that have been mentioned by banks, in terms of agriculture in general in terms of a bankability of offer letters, and then offer letters and things like that, and we hope funding will be done locally. The recent announcement that Agribank will be converted to focus on farming, will address such issues.
FM: What is the licencing regime at TIMB?
AM: The licencing requirement is that companies must have an export market for their crop. In addition, there is a minimum required support, say US$1 000 and the hectarage for small-scale farmers is going up to about two or three hectares. For large scale farmers, it’s minimum of US$4 000
FM: There is a directive from the Agriculture minister to increase output to 300 million kg of tobacco by June 2021. What’s your take?
AM: That one is a good directive. It’s not out of this world. We believe it’s very feasible. Three years ago, we actually produced 262 million kg. So to add another 40 million kg will not be difficult. If funding is available, farmers are ready to produce.
FM: What have you planned after leaving office in April?
AM: I have enjoyed my stay. I don’t know what I will do. But I might take a bit of a break; do some private ventures. This is an amicable separation and was done in terms of the Public Entities Corporate Governance Act. I have spent more than 10 years in the industry after joining in 2005 as the head of technical services. And then later on was appointed acting CEO in 2007 before being confirmed as CEO in 2009.