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Samuel Kadungure
Senior Reporter
VOEDSEL Tobacco International — an indigenous company in the tobacco sector — is targeting to buy 25 million kilogrammes of contracted golden leaf at a cost of US$75 million.
The company’s managing director, Mr Tenson Wandi said this will be an increase of three million kilogrammes from the 22 million kgs purchased last season.
They will pay an average price of US$2.85 per kg.
Voedsel contracted 18 000 farmers this season, out of which 10 000 are in Manicaland.
The growers received funding, fertilisers, fuel, coal, chemicals and extensive agronomy assistance worth US$12 million. In return, the growers are expected to sell the crop to the company.
Mr Wandi said growers must open bank accounts with one bank to improve payments.
“Our payments will be prompt, with payments reflecting in farmers’ accounts within 48 hours. We are trying to improve efficiency,” said Mr Wandi.
He said they have acquired a processing plant for US$6m.
The plant will be in the country before the end of the year.
“At the moment we rely on third parties to process our tobacco, and we are not given preference. We might have a customer who needs our tobacco within a stipulated timeframe, but the processors won’t allocate us space, thereby leaving us without option.
“They normally process our tobacco in November or December. We are the last.
So far we have only managed to export about 10 million kgs, so the plant will smoothen our operations. We will be able to process and ship our orders on time,” he said.
In the past, the tobacco industry was wholly controlled by a few white commercial farmers, and Voedsel is now the only indigenous company that has broken this monopoly in processing, trading and exporting the crop.
“Our vision is to become the best in the tobacco industry in Zimbabwe. Tobacco farming is a serious business, and for it to be sustainable, we need to transform the lives of the farmers,” he said.
The company has acquired 10 hectares of land in Rusape where it is building a state-of-the art auction floor with a capacity to hold 6 000 bales per day.
The land cost was US$364 000.
The auction floor comprises of on-site banking halls, separate dormitories for men and women, an admin block, canteen and ablution facilities.
The auction floor is expected to open its doors to the public in 2023.
The company’s chief executive officer, Mr Innocent Mahufe said they have been studying the history of tobacco farming to see where farmers were being exploited so as to take corrective measures.
“There was an imbalance — when growers go to the floors they come back with nothing. Government then played a key role by transforming indigenous black commercial farmers into tobacco merchants.
“We have grown so big because we know the problems faced by growers as we were farmers before. We know their needs and are aware of where they are being taken advantage of. We are here to correct those wrongs by paying them competitive prices. A good leaf should fetch a good price, and that is the secret that makes our farmers happy,” he said.
He said indigenous merchant firms must be given space to grow and compete among themselves to benefit the grower.
“When you compete for the same product the price goes up for the benefit of the farmer. We need to raise young indigenous merchant companies, hence our decision to buy the processing plant from Malawi. We want to accommodate those indigenous merchant companies that are currently being shunned due to low volume orders.
“They are being denied access to the processing houses because their volumes are low, but we need to embrace and give them the opportunity to process and export their tobacco regardless of the quantities. I foresee the tobacco industry dominated by indigenous players,” he said.
Mr Mahufe said the farming season had good rains, hence the goof quality of the tobacco.
He said given that tobacco is the country’s largest foreign currency earner and contributes significantly to national economic growth, there is need to ensure that the gold leaf produced through the various loan facilities finds its way to those who financed its production.
He discouraged contracted growers from side-marketing their crop to avoid repayment of loans.
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