Extending indigenisation

Tafadzwa Ndlovu
A Harare pharmacist and businessman has initiated a scheme that gives his workers some stake. Under the employee share ownership scheme, Mr Brighton Chawatama says employees are able to own and run their own pharmacies under a franchise.He said he would give 25 percent shares from each of his medical outlets to his employees in a move to support the Government’s indigenisation and empowerment policies. Bright Pharmacies owner, who runs nine pharmacies, said his branch managers got 15 percent shareholding while the other employees would share the remaining 10 percent.

“I have realised that you cannot grow on your own hence the need to work as a team so that a business like this can prosper,” he said.

“I decided to partner with my employees so that we work together in this franchise concept whereby each pharmacist with their branch and staff are able to run and own part of the business. Not only will they run the business and get shares but they also continue getting their salaries. The shares are just a bonus.

“Locally developed franchising businesses are relatively few.

“Most of the franchises operating in Zimbabwe are either South African based or international. An opportunity therefore exists to tap into this internationally tried and tested business model and use it to achieve the company’s objectives.

“Through the Government initiative of indigenisation and empowerment, they will also improve staff commitment and loyalty when the employees realise that they are also owners of the business,” said Mr Chawatama.

His model has attracted the attention of the Government. Minister of Small and Medium Enterprise Development Cde Sithembiso Nyoni recently visited Bright Pharmacies where she discussed her intentions to develop the company’s proposal to venture into manufacturing and how this could be linked to implementation of ZimAsset.

She said 10 pharmacies from each province which performed well had been chosen by her ministry under a plan to capitalise and develop them. Bright Pharmacies was one of them.

“Small to medium enterprises are the backbone of this economy but most of them are still informal,” the minister said.

“The thrust for 2014 is to formalise, grow them and link them for sustainability. We want to work with those that have the experience so that we grow them from small to medium then move them to large enterprises.”

Minister Nyoni hailed Mr Chawatama’s business model.

“You have developed a model that my ministry is proud of, a model of caring and sharing.

“What has killed other businesses is corruption, selfishness and greed where people want to be big at the expense of others,” she said.

Although the country’s indigenisation and empowerment policies have been roundly criticised in some political circles, they are yielding positive results on some front with local businesses developing models that are equitable and sustainable.

Mr Chawatama’s model is just one shining example of the impact of the country’s indigenisation and empowerment policies.

Some employees at Bright Pharmacies expressed gratitude to Mr Chawatama, hailing his initiative as fair and just.

Said Moses Munetsi-Dube: “It is very good that we are able to get shares considering that I have worked at Bright Pharmacies for quite a long time. It is a great thing that we are also being empowered and I feel that we are now an independent country whereby fellow black men allow others opportunities to help them grow.”

The employee share ownership scheme can help a business to expand and flourish.

Through involvement of senior management in the business, a company fosters a sense of ownership in the management leading to improved cost control and stock management and consequently greater profitability.

The company also improves cashflows and achieves better staff retention at the management level and grows the company brand. The shareholding builds a dedicated and motivated labour force.

Employees become privy to information on current and future prospects of their business by having access to and harnessing that information.

The scheme provides a fair representation of employees in the governing body of a business resulting in broad-based participation in the organisations.

Employees also become empowered through additional monetary value as they receive dividends from the profits of the company.

Upon retirement, employees are guaranteed an improved retirement package following the disposal of their shares.

On changing jobs, an employee can also become economically empowered through share disposal.

The model also has its loopholes because it requires huge sums of capital for a franchise set up. For example to start a franchise at the Southerton branch it requires around US$45 000. A company might suffer from theft by undisciplined employees who take stock knowing the business is theirs. Analysts say that the model has some demerits. In cases where the share price of the company does not increase this can affect morale and staff retention.

They also say that share ownership, specifically option plans, can be dilutive, that is as more shares are issued each share you own becomes a smaller percentage of the company.

The nine branches of Bright Pharmacies are located in the Harare city centre, Southerton, Westgate, Epworth, Dzivaresekwa, Kadoma, Chivhu and Bindura.

Mr Chawatama plans to open a medical centre in Southlea Park.

He said future prospects of Bright Pharmacies lay in wholesaling and manufacture of drugs essential for both Government and the private sector. At the moment, he said, they were into compound manufacturing on a small scale.

“We are also working with tertiary institutions such as the Harare Institute of Technology so that graduands from the relevant programmes can also come and produce local drugs at our laboratories that we are going to be opening soon,” he said.