What have been the main issues and achievements of Import& Export?
In the past 3 years, Import & Export is gone from being a parastatal to become a fully private company. The majority of the shares used to belong to Malawi Development Corporation which is a parastatal. In 1998, it was quickly swoped between John Polts (Lonrho Africa) and MDC. Now 80% of the company belongs to Lonrho and the residual 20% which was lent by MDC. It is now in the process of being privatized. But Lonrho has decided to restrict the privatization of the 20% to local partners here in Malawi. So that the ownership has changed dramatically the last 3 years. The other feature is that the company is now focussing on the trading field, the wholesaling and retailing of consumer durable goods to Malawi public. We are now leading up to a highly focussed company.
What does it mean for the future of company? In which particular aspects of consumer goods are you focussing?
General consumer goods, supermarkets and wholesale cash and carry outlets. First of all in the rural area the main objective is to supply the small indegineous retailers and wholesalers with essential goods. And in that way it’s highly focussed. We do not deal in any form of luxury goods. We are dealing with the most basic commodities and we want to stick to this segment.
What does it mean in terms of the market? Obviously if you are focussing, there’s a reason for what your expectations will be.
Chipiku was originally set up for service to small indegenious business stores in the rural area and provide them with the basic commodities that rural farms required.
It has lost its way and we are bringing it back to its historical role. The problem is that the organization got involved in a multitude of different disciplines and my task has been to bring the organization back to what it was originally set up to do which is whole selling and retailing of consumer goods to the rural areas as well as continuing to establish supermarkets in the main centers of the country.
Providing this kind of service, is it competitive at the moment? Who are your main competitors? What is the structure of the market? Are you all acting on the same segment?
Yes indeed, the market is very competitive. Our main competitors are PTC and McConnell. But we have different aims. Chipiku sees its role as the efficient distribution of locally manufactured goods. There is a very significant difference between McConnell and us as they have an imported goods department. Chipiku deals with the lowest on the market.
As far as the position in the market you would like to have, do you have a strategy?
Yes we do. At the moment, the Chipiku chain has the largest spread of stores in Malawi. It operates with 90 outlets all over the country in every single district. Our intention is to go back to the original intention which was to set up a Chipiku store every 50 kilometers.
As transport is a problem in Malawi, we want to go where the people are and therefore concentrating on the rural network for people to be able to access easily consumer goods without having to travel long distances.
Basically, the next year will be the rehabilitation of our existing operations. And then we will look into further expansion possibilities. That doesn’t mean that if an interesting offer comes up, we would not give it a consideration but it is not our main trust.
What kind of image does Import & Export have in Malawi?
The Chipiku chain still has a tremendously good name in rural minds. People will say "I’m going to a Chipiku" rather than going to a wholesaler. It was the first supermarket trend in this country started 50 years ago. But the image needs to be rehabilitated as very little capital expenditures have been done the past few years. The presentation of the supermarket, the refrigeration, the stores themselves. New, substantial investments will be made. As Import & Export has a large portofolio which is in the process of being liquidated and putting back in the company as working capital. The resources are in the business but in the wrong position still. And hopefully, the new owners have intentions of investing as well.
| How do you expect the company to be looking within 5 years?
I expect the company to be in the sort of position where we will have developped a product in Chipiku that can be exported. The concept in African terms is fairly unique. There is no wholesale trend of the scale of Chipiku in any of the countries surrounding us.
The Chipiku way of operating is so simple. You do not need electricity, telephone. You just need a structure. It’s all in the ranges and the incentive skills and the systmen there that makes the chain rotatives. And I think this is something that could be exported in Zambia, Tanzania, and North Mozambique – all our neighbours. We have now locked the point where our expansion possibilities in this country have become limited. Our intetion is to concentrate on the urban areas and to become a niche market player. We are going to position ourselves above the PTC chain. We want to provide facilities such as bakeries, put butcheries in every store and we want the emphasis to be on services to the customers. As PTC’s are very much of a self service operation, we would like a greater service. We want to set up wilder and different ranges. I see Chipuku as the real potential, and Kandodo will be the cherry on the top of the cake: the chain that provides the best merchands, an upmarket trend. We realised we have a long way to go but there’s no reason why we can’t do it.
What we need here is intermediate technology. We need structures in business but not necessarily the biggest and the best and the most costly, but structures that provide people with what they want at prices which are reasonnable. With Chipiku, we could go for cash registers, for great levels of technology but somebody has to pay for it. And in poor countries like Malawi, it’s not necessarily an easy thing to do.
When you talk about the export market, could you possibly looking for ventures out there, potential partnerships?
I would say that I’m a great believer in ventures. When you go in a country, it’s good to look for someone who’s already on the ground for knowledge and culture purposes. It is also important that people of the country you get involved into has some ownership of what you do.
I’m just a bit worried about our ability to compete in an open market situation. In terms of the particular business, I’m confident that we will compete effectively and well and will survive. For other industries in this country, I would be pessimistic. They’ve been operating for too long in a protective environment and I don’t see them doing what’s necessary to be competitive.
Will the product base diversify?
Of course. When they established the first fast food chain, the trend was mainly expatriates and indians. Now, you go there at lunch time, and you will notice that it’s 100% malawian. When he started, the people didn’t have the money to go there. The incomes have increased and will continue to do so. In the supermarket industry, we see it by analysing the range we had in offer 10-15 years ago and the range we have today. That tells you the story.
What continues to motivate you?
When I wake up, I have to enjoy the day. I’m simply enjoying the business I am in. There’s a lot of potential in Malawi despite the problems you can sometimes face. What make me stay is the challenge that it represents. Everything is possible. It just depends on the motivation you have. Malawians, as anybody else, want to be successful.
Do you have any program for training your staff?
Yes, I have brought in three very well qualified expatriates to work on the field training. They have all been brought in on the basis that they are short term 2 to 3 years contracts and their objectives during this time should be to train Malawians to a level where they can run a business.
Why would be your final message to our Forbes Global readers?
Basically, do not block Malawi out. I think that, at the end of the day, Malawi has a great future, and many mouths to feed. The companies that come into this continent and stick through the problems here are the companies that will dominate in the future. |
IMPORT & EXPORT (MALAWI) LTD.