adminConrad Mwanawashe Harare Bureau
SAVANNA Tobacco is set to roll out 300 kiosks which will operate as mini-depots countrywide in the next 12 months starting in Harare. “Over the next year or so we want to roll out in excess of 300 kiosks countrywide. We’re piloting the situation where the first lot of people to take the kiosks will be under lease-to-buy,” said Savanna Tobacco head of marketing, Gerald Gumbo.
The company will roll out between 40 and 60 kiosks per month.
Vendors play a significant part in the cigarette selling business contributing between 55 and 60 percent to the cigarette manufacturing industry’s volumes.
“We’re looking at the current vendors who move most volumes in that particular market, offer them the opportunity to run the kiosk as their own business, stock for their counterparts and from their profit margins pay the cost of the kiosk and after a couple of months they’ll own the kiosk,” said Gumbo.
Last year Savanna licensed about 1,400 vendors in Harare alone while between 4,000 and 8,000 vendors stock the company’s products countrywide
The toasted tobacco products led by Pacific Storm are Savanna’s volumes drivers contributing about 90 percent to volumes while menthol and virginias account for eight percent and two percent respectively. Virginias are Savanna’s margin drivers.
Capacity utilisation is at between 50-60 percent. Savanna has capacity to produce upwards of 30,000 master cartons per month.
On the export market, Gumbo said Savanna is doing well benefiting from the cross pollination of social trends in the region.
“Our brands will also filter across in terms of its appeal to the people. Therefore the more we grow locally the more we become a regional player and the more it creates conducive conditions in external markets,” said Gumbo.
Exports make up 80 percent of the company sales in line with the Zimbabwe Investment Authority export requirements.
No capital expenditure is expected in the next five to 10 years as the company’s equipment is “the best in the market”.
“With our level of excess capacity we could very easily service the entire country and our export needs without need for retooling or getting new equipment. We’re confident that from the capital expenditure point of view we’re covered for at least the next five to 10 years,” said Gumbo.
Since inception in 2002 Savanna has invested between $20-$30 million.
Last Friday, Savanna cemented its relationship with the informal market by teaming up with the Harare Informal Traders Council to give material support to vendors and informal traders across the country.
Online Reporter