Online Reporter
LOCAL authorities used to import all their needed chemicals for treating water and this added to the many woes faced by urban residents as shortages arose, especially in the days of tight foreign currency supplies before exports grew enough to produce positive trade balances.
Today, the position is far different with many of the main chemicals being produced in Zimbabwe and, in one of the major turnarounds, the main chemical, aluminium sulphate, is not just being supplied to the local market but an even greater quantity is being exported to four other Sadc countries with two more likely to provide markets soon.
This is seen as what the modern industrialisation drive of the Second Republic is all about, not just import substitution although that is important, but having the capacity to export and the quality at a competitive price to find those export markets.
Some raw materials have to be imported, but when export sales are close to double local sales the value added in Zimbabwe almost certainly leaves a healthy net positive balance on the books of Chilmund Chemicals of Bindura when it compares its import costs with export earnings.
And there is still available capacity at the Bindura factory to increase total sales by more than 30 percent before the factory needs to be extended.
This allows the company to invest in other products, including pushing up Zimbabwe’s production of sulphuric acid, a key material in its manufacture of aluminium sulphate as well as the rising demand from the rapidly expanding fertiliser industry and other new industrial products.
Aluminium sulphate is generally the first chemical applied in treating raw water drawn from lakes and reservoirs. While the extraction is normally from below the surface, avoiding the worst of the floating debris, and large chunks of other materials in the water column can be eliminated with simple sieve-level filtering, the often filthy water contains a large quantity of tiny particles, the things that make murky water so murky.
Dissolved aluminium sulphate coagulates this muck into far larger bits that soon settle at the base of the tank, allowing clean and clear water to move into the next stages of having its acidity balanced, usually by addition of lime which is now also produced in Zimbabwe, and any dissolved toxic chemicals removed by activated charcoal, and then chlorination to prevent contamination by microbes and germs as the water is distributed.
The state of some urban supply dams, especially those that supply Harare, means that the aluminium sulphate stage produces an incredible quantity of coagulated muck and disposing of this safely is just one of the burdens imposed on the average city engineer.
Chilmund’s history and success has been chosen as a one of the examples being publicised before the Zimbabwe Industrialisation Conference and Expo late next month. The company was founded in the difficult years, in 2007, with seven employees to trade in vital chemicals.
Manufacture came significantly later with the required investment into the ultra-modern plant, one of just five of its type in Africa, being one of the fruits of the Second Republic’s new investment strategies.
So the staff of seven organising import orders became 200 permanent production workers running a factory and a roster of extra casual labour called in when necessary, such as loading the trucks to ship out a large order.
Oddly enough the company was given some import protection by a statutory instrument, but that appears to be now totally unnecessary, considering its export orders. By becoming an exporter, in fact relying on two thirds of its present market from regional water processors after filling all local demand, the company has shown that no one in the immediate region is likely to be able to undercut its prices, at least for a quality product.
Import substitution can risk seeing lower quality products being sold at unrealistically high prices, a problem that once was common in several sectors of the very closed Zimbabwean economy from 1965 until this was opened to import competition from the late 1990s and totally so in the dollarisation era.
Survivors from that era are now growing fast having successfully met the need for good quality at a competitive price, and all the stronger for that, while many of the new industrial companies learned from day one that they needed to build their export markets at least as fast as their local markets with the double market usually making them highly viable through economies of scale, justifying the investment, and ensuring that they could make profits on competitive margins.
This is how all industry needs to grow. Local markets are important but they are just a starting point and help ensure that good references can be supplied to foreign buyers.
With the growth of the African Continental Free Trade Area these sort of larger markets can become easier to find, but again the stress will be on high quality at a competitive price with first class back-up.
