A CEO’s mission to transform a State enterprise
When Allied Timbers Zimbabwe was born out of the then Trading Division of the Forestry Commission in 1954, not many people could have envisaged that it would one day morph into a giant in the wood industry.
Starting from virtually nothing – without an adequate supply of trees to process timber, limited machinery, and hardly any technology to talk of – the firm was to defy huge odds to become a force to reckon with.
Slowly but surely, the plantations started to take form. Machinery was acquired and sophisticated technology for harvesting and milling was brought in from countries like Germany and the United States.
At Independence, as part of the first generation of State enterprises, ATZ boasted a bright management team that came up with strategies such as diversification and value addition to take the company forward.
On top of regional markets, the company entered Europe and the US with raw timber and finished products.
The social and economic benefits where huge, the surrounding communitt and the entire nation benefited in abundance with the company employing thousands of people.
But dark days were to come.
Western countries imposed sanctions on Zimbabwe at the turn of the millennium and ATZ responded badly with management failing to cope with the changing environment.
Infrastructure started deteriorating, hardly any re-planting was done to replace harvested forests, some of plantations were destroyed by fire, the company stopped exports, and little re-tooling was seen.
“We have to start again because everything is gone, it was destroyed, and it’s as if the strategy was to destroy. We are suffering, we are reeling from internal sanctions which were internally designed by our own son. Can you believe it?” asks the new ATZ chief executive officer Mr Daniel Sithole.
In a wide-ranging interview, Mr Sithole explains the state of things at ATZ, saying the company has not been planting any trees and needs at least 25 years to return to peak production.
Mr Sithole, without mentioning names, blames the previous administration for the troubles bedeviling ATZ, which has been operating at a loss for the past 10 years.
As a founding administrator of the company who left in 2000 to pursue other interests only to bounce back recently, Mr Sithole frankly discloses that the State-owned firm is virtually broke, is without machinery, lacks modern technologies and presides over bare tracts of land.
In the unsolicited interview, Mr Sithole chronicles how Allied Timber went from rags to riches and to rags again.
“When I was appointed I travelled the whole country to see what is on the ground and I was shocked, I couldn’t believe it; hardly any planting was done and the new trees that we have there are trees which grew up on their own, what we call volunteer cropping,” he says.
“We found that more than 50 contractors with more than 70 sawmills were competing to cut down the trees. There was absolutely no control, our estates are porous, and for every 20 hectares of our timber forests we have about one kilometre of road.
“In 2000 we had about 45 000 hectares planted and that was about 2 200km of road network so it was difficult to monitor 50 contractors, it was haphazard cutting. It is impossible to monitor. We also noticed that the sawmills we had were totally neglected. When we commercialised, we commercialised towards privatisation and commercialisation made the company more efficient.
“We came up with a new vision and strategy of looking beyond the trees. We had at least four strategies, human capital development, extension plantation development, building a new sawmill, the Chimanimani sawmill and whole new technology for our sawmills and then we decided to value add and diversify our products.
“We had all the technology to cut, process and value and thus we were exporting straight to Europe and America. We then built a door plant in Mutare, a versatile technology with full strength and Germany technologies to value add. Doors, windows and coffins were being exported straight to Europe and America.
“We complemented the re-tooling we did to our mills with state of the art harvesting, haulage fleets, and all machinery was there.”
Mr Sithole says all of the work that had been done was reversed.
In apparent reference to the previous administration, Mr Sithole said his immediate predecessors deliberately ran the company to the ground.
“Now if you go to the factories you will see litter, vehicles and machinery destroyed. You will think there was a Third World War, everything was destroyed it is as if the strategy was to destroy. We are suffering, we are reeling from internal sanctions, these sanctions were internally designed by our own son, can you believe it.
“You go and look at the welfare of our employees they were totally neglected, everything is gone and we have to start again, we had machines bolted on the ground but they are gone.
“The fleet of harvesting haulage is gone. If you go to our central workshop in Mutare it’s a mess, you wonder what happened, did a twister hurricane pass through?” Mr Sithole asks.
“With the resource that we had then we decided to do extension planting to build a robust bank for the biological asset. In Nyangui, Maswera beyond Stapleford and Nyamukwarara Valley we had planted. So by year 2000 when I was still in charge we had a robust bank, reserve bank of the biological asset.
“But they made a fair attempt of destroying the bank, fortunately Nyangui is remote so it was spared, Cashel still good but they were now busy cutting it down. It was done by someone who had technology of forestry and used that technology to destroy.
“The number of careers that were destroyed, it’s sad. There was a deliberate plan to get rid of everyone who had knowledge in forestry and wood technology, the strategy was value leakage overall and then a structure that implements.
“There is a team of foresters who are called working plants foresters, they are the forest accountants. These foresters virtually live in the forest because every tree growing in the forest plantation has to be accounted for, so these foresters monitor the growth of the trees.
“Every year they produce what we call the annual increment and the annual increment is the marginal productivity of the forest and after every five years they produce the mean annual increment which is the average productivity of the forest and that’s what determines the annual allowable cut and it is from the annual allowable cut that we determine our budget.
“That team of forest accountants was removed and right now they don’t exist, they were removed. The social cost of the plundering that has been happening is huge.”
To put ATZ back on its footing, Mr Sithole says ATZ will secure timber resources through abandonment of the saw milling model.
He says rapid appraisal of timber resources, sawmills, factories and plant equipment will also help improve things. The company wants to secure loans to recapitalise its operations and resume exports.
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