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An Enterprise Map of Zambia

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i i “zambia” — 2013/2/26 — 9:27 — pagei—#1 i i AN ENTERPRISE MAP OF ZAMBIA i i i i i i “zambia” — 2013/2/26 — 9:27 — page ii — #2 i i i i i i i i “zambia” — 2013/2/26 — 9:27 — page iii — #3 i i AN ENTERPRISE MAP OF ZAMBIA John Sutton and Gillian Langmead i i i i i i “zambia” — 2013/2/26 — 9:27 — page iv — #4 i i Copyright © 2013 International Growth Centre Published by the International Growth Centre Published in association with the London Publishing Partnership www.londonpublishingpartnership.co.uk All Rights Reserved ISBN 978-1-907994-10-4 (pbk.) A catalogue record for this book is available from the British Library This book has been composed in Utopia using TEX Copy-edited and typeset by T&T Productions Ltd, London Cover design: LSE Design Unit Cover photographs courtesy of First Quantum Minerals and Universal Mining and Chemical Industries Limited Printed in the UK by Hobbs the Printers Ltd ® MIX Paper from responsible sources FSC® C020438 i i i i i i “zambia” — 2013/2/26 — 9:27 — pagev—#5 i i CONTENTS About the Authors ix Acknowledgements xi Acronyms and Abbreviations xiii 1 Introduction 1 2 Widely Diversified Firms 13 2.1 Profiles of Major Firms 13 Trade Kings Limited, Gourock Ropes & Canvas Limited, Agro-Fuel Investments Limited (AFIL) 3 Floriculture and Horticulture 21 3.1 Sector Profile 21 3.2 Profile of a Major Firm 24 Khal Amazi Limited 4 Agribusiness and Food Processing 27 4.1 Sector Profile 27 4.2 Profiles of Major Firms 35 Zambeef Products Plc, Alliance One Zambia Limited, Zambia Seed Company Limited (Zamseed), National Milling Corporation Limited, Hybrid Poultry Farm (Zambia) Limited, Zambia Sugar Plc, Gourock Industries Limited, Speciality Foods (Z) Limited, Northern Coffee Corporation Limited, Amigo Foods Limited 5 Beverages 57 5.1 Sector Profile 57 5.2 Profiles of Major Firms 60 Zambian Breweries Plc, Varun Beverages (Zambia) Limited, Californian Beverages, Natural Valley Limited, Invesco Limited i i i i i i “zambia” — 2013/2/26 — 9:27 — page vi — #6 i i vi CONTENTS 6 Cotton 71 6.1 Sector Profile 71 6.2 Profiles of Major Firms 74 Dunavant Zambia Ltd, Cargill Zambia Limited, Alliance Ginneries Limited 7 Textiles, Garments and Leather 81 7.1 Sector Profile: Textiles and Garments 81 7.2 Sector Profile: Leather 85 7.3 Profiles of Major Firms 87 Unity Garments Limited, Zamleather 8 Wood Products 91 8.1 Sector Profile 91 8.2 Profile of a Major Firm 93 Bisonite Zambia Ltd 9 Paper and Packaging 97 9.1 Sector Profile 97 9.2 Profiles of Major Firms 99 Sobi Industries Ltd, Nampak Zambia Limited 10 Construction 103 10.1 Sector Profile 103 10.2 Profiles of Major Firms 108 Velos Enterprises Limited, Nemerit Enterprises Limited, Zambia Engineering and Contracting Company Limited, Jiangxi Construction Engineering (Group) Corporation Limited 11 Building Materials 115 11.1 Sector Profile 115 11.2 Profiles of Major Firms 117 TAP Zambia Limited, Safintra Zambia Ltd 12 Cement and Quarrying 121 12.1 Sector Profile 121 12.2 Profiles of Major Firms 123 Lafarge Cement Zambia Plc, Scirocco Enterprises Limited (Oriental Quarries), Zambezi Portland Cement Limited i i i i i i “zambia” — 2013/2/26 — 9:27 — page vii — #7 i i CONTENTS vii 13 Metals, Engineering and Assembly 129 13.1 Sector profile 129 13.2 Profiles of Major Firms 134 Metal Fabricators of Zambia PLC (ZAMEFA), Good Time Steel Company Limited, Universal Mining and Chemical Industries Limited (Kafue Steel), Kavino Limited 14 Chemicals and Pharmaceuticals 143 14.1 Sector Profile 143 14.2 Profiles of Major Firms 148 Indeni Petroleum Limited, Nitrogen Chemicals of Zambia Limited, Afrox Zambia Limited, Ndola Lime Company Limited 15 Plastics and Glass 155 15.1 Sector Profile 155 15.2 Profiles of Major Firms 158 Lamasat International Zambia Ltd, Capellaro Investments Ltd, Lamise Investments Limited 16 Minerals Processing 163 16.1 Sector Profile 163 16.2 Profiles of Major Firms 166 First Quantum Minerals Ltd, Konkola Copper Mines Plc, Scaw Limited, Chambishi Copper Smelter Limited i i i i i i “zambia” — 2013/2/26 — 9:27 — page viii — #8 i i i i i i i i “zambia” — 2013/2/26 — 9:27 — page ix — #9 i i ABOUT THE AUTHORS John Sutton is the Sir John Hicks Professor of Economics at the London School of Economics. Gillian Langmead is the managing director of Zambia-based communica- tions firm Langmead & Baker Ltd. She is a former financial journalist and editor, and her 30-year career has involved work across Africa, Asia and Europe. The International Growth Centre (www.theigc.org) promotes sustainable growth in developing countries by providing demand-led policy advice based on frontier research. The IGC is directed and organized from hubs at the London School of Economics and the University of Oxford and comprises country offices across the developing world. The IGC was initiated and is funded by the Department for International Development (DFID). John Sutton’s Enterprise Map Project aims to provide a standardized descriptive account of the industrial capabilities of selected countries in sub-Saharan Africa. This is the fourth volume to appear, following volumes on Ethiopia (2010), Ghana (2011) and Tanzania (2012). i i i i i i “zambia” — 2013/2/26 — 9:27 — pagex—#10 i i i i i i i i “zambia” — 2013/2/26 — 9:27 — page xi — #11 i i ACKNOWLEDGEMENTS The authors would like to express their appreciation to all the companies, organizations and individuals involved in the production of this book for their support, time and enthusiasm. In particular, we would like to thank the representatives of the profiled firms who agreed to be interviewed by our researchers and who provided important insights into their businesses. The book would not have been possible without the support of the Zambian government, particularly through the acting permanent sec- retary at the Ministry of Commerce, Trade and Industry, Ambassador Albert Muchanga, and Miyoba Lubemba and her team at the Zambia Development Agency, who provided detailed statistical information and background research into the various sectors of the Zambian economy. The Central Statistical Office was also a valuable source of data. A number of trade associations supplied information and data, including the Zambia Association of Manufacturers, the National Construction Council and the Zambia Coffee Growers Association. Assistance in facilitating the research was provided by Felix Mwenge at the International Growth Centre. The profiles of the Chinese firms were coordinated by Qi Zhang of the London School of Economics. Finally, the Langmead & Baker research team of Daniel Tonga, Georgina Smith, Sakabilo Kalembwe, Kenny Mvula, Margaret Samulela and Todd Jennings played a key role in the project by meeting with the fifty companies profiled. i i i i i i “zambia” — 2013/2/26 — 9:27 — page xii — #12 i i i i i i i i “zambia” — 2013/2/26 — 9:27 — page xiii — #13 i i ACRONYMS AND ABBREVIATIONS AFIL Agro-Fuel Investments Limited AIM Alternative Investment Market CDC Commonwealth Development Corporation CEO Chief Executive Officer CNMC China Nonferrous Metal Mining (Group) Co., Ltd COMESA Common Market for Eastern and Southern Africa COMPACI Competitive African Cotton Initiative EU European Union FDI Foreign Direct Investment FQM First Quantum Minerals FRA Food Reserve Agency GDP Gross Domestic Product GTS Good Time Steel Company Limited HDPE High-density polyethylene INDECO Industrial Development Corporation KCM Konkola Copper Mines Plc KIFCO Kabwe Industrial Fabrics Limited LINTCO Lint Company of Zambia LME London Metal Exchange LPG Liquefied petroleum gas mt Metric tonne NCC National Council for Construction NCCL Northern Coffee Corporation Limited NCZ Nitrogen Chemicals of Zambia NLC Ndola Lime Company Limited NMC National Milling Corporation Limited NORSAD Nordic/Southern African Development Community PET Polyethylene terephthalate PRA Pharmaceutical Regulatory Authority PSPF Public Service Pension Fund SADC Southern African Development Community SAG Semi-autogenous grinding Stancom Standard Commercial Corporation i i i i i i “zambia” — 2013/2/26 — 9:27 — page xiv — #14 i i xiv ACRONYMS AND ABBREVIATIONS TAZAMA Tanzania Zambia Mafuta UK United Kingdom US United States UMCIL Universal Mining and Chemical Industries Limited VAT Value-added tax ZABS Zambia Bureau of Standards ZAFFICO Zambia Forest and Forestry Industries Corporation ZAMEFA Metal Fabricators of Zambia PLC ZCCM Zambia Consolidated Copper Mines ZECCO Zambia Engineering and Contracting Company ZEGA Zambia Export Growers Association ZESCO Zambia Electricity Supply Corporation ZIMCO Zambia Industrial and Mining Corporation ZPC Zambezi Portland Cement ZSR Zimbabwe Sugar Refinery i i i i i i “zambia” — 2013/2/26 — 9:27 — page xv — #15 i i AN ENTERPRISE MAP OF ZAMBIA i i i i i i “zambia” — 2013/2/26 — 9:27 — page xvi — #16 i i i i i i i i “zambia” — 2013/2/26 — 9:27 — page1—#17 i i Chapter 1 INTRODUCTION Zambia’s economy has grown rapidly over the past decade. Gross domestic product (GDP) per capita rose by 80% between 2000 and 2010. The copper sector played a key role in this growth, but all the other major sectors of the economy also expanded: manufacturing output grew by 50% in the same period. Much more importantly,manufacturing exports have recently surged, increasing eightfold in real terms between 1995 and 2011. If this growth performance can be sustained for another decade, it will bring about a major advance in Zambia’s economic fortunes. Can this be achieved? Any assessment of Zambia’s economic prospects needs to be rooted in a detailed understanding of its industries and firms. • What are the country’s current industrial capabilities? • Where did those capabilities come from? • And in what areas can we reasonably anticipate a substantial advance in the country’s industrial capabilities? An Export Map This book provides an overview of Zambian industry (agribusiness, manu- facturing and construction).
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