The Sunday Mail
Trade Focus
Allan Majuru
MOZAMBIQUE’s largest trade fair, the Maputo International Trade Fair (FACIM), which ends today, is one of the many events that constantly bring evidence that regional markets prefer Zimbabwean products compared to competition.
FACIM, which ran from August 29, is a multi-sectoral trade promotion event that brings together buyers from across Mozambique and suppliers from the rest of the world.
At the fair, national trade development and promotion organisation ZimTrade facilitated participation of 15 local companies, including women-led enterprises.
Participating companies were drawn from sectors such as processed foods, construction, engineering, packaging, furniture, fast-moving consumer goods, as well as clothing and textiles. This was the first time for Zimbabwe to have a pavilion at FACIM.
Orders generated at the fair will help grow trade with Mozambique, which is currently the third largest export market for Zimbabwe.
According to Trade Map, Mozambique imported products worth around US$509 million in 2021 and these were largely iron and steel; ores, slag and ash; as well as tobacco and manufactured tobacco substitutes.
Increased participation of Zimbabwe at regional and international trade exhibitions falls within the current economic diplomacy efforts by Government, through the Ministry of Foreign Affairs and International Trade and ZimTrade.
During the trade fair, participating Zimbabwean companies were exposed to leading buyers in Mozambique and discussed requirements, orders, pricing and other key areas of interest.
It was during these business-to-business meetings that participating Zimbabwean business received notes on best approaches that will ensure success on the market.
Quality of Zimbabwean products and competition
Discussions on potential orders with distributors started from the point of quality, where distributors confirmed the superior quality of Zimbabwean products.
According to Trade Map, the import bill for Mozambique has grown from around US$5,8 billion in 2017 to US$8,6 billion in 2021.
Currently, major supplying countries include South Africa, China, India, United Arab Emirates, Singapore, Portugal and Malaysia.
At this year’s FACIM, more than 20 countries participated, which shows the level of excitement that Mozambique has generated across the world.
Products that were on display from Zimbabwean companies that received positive reviews include agricultural equipment such as small tractors and planters, as well as household, industrial and farming pipes.
Protective footwear and clothing, leather products, timber, batteries and irrigation products from Zimbabwe were described as the best by potential buyers.
Visitors to the Zimbabwe pavilion also commended the quality and natural taste of locally processed and manufactured goods such as sauces, drinks, crisps and tobacco.
Buyers indicated that the Mozambique market is sensitive to supply patterns and potential suppliers need to ensure they have enough production capacity to sustain demand.
As a competitive market, it is easy for buyers to move to other suppliers if one fails to deliver agreed quantities.
Thus, small businesses looking to explore the market must consider consolidating, which will not only meet required quantities but also allow them to share costs of logistics.
Competitive price
To break into the market, local companies must benchmark their prices with competitors from countries such as South Africa, Belgium and China.
Where suppliers are not able to match prices, they need to ensure that their products are well-differentiated from what everyone else is supplying.
Further to this, companies must fully utilise existing bilateral trade agreements between Mozambique and Zimbabwe, designed to reduce customs and other related costs on qualifying products.
Leveraging on the SADC trade protocol will also improve competitiveness since local products will have duty-free and quota-free access.
An efficient logistics plan should be in place to consistently deliver products to Maputo at minimal costs.
Packaging and labelling
Due to the high volume of goods being imported into Mozambique, products that are in formal stores have good packaging.
This makes packaging a key success factor for Zimbabwean products.
Complying with specific packaging and labelling standards as required by the Mozambique customs agency is imperative.
For example, the most important element on labelling is the Portuguese language, which is mandatory on all food products.
Failure to comply with labelling requirements will make it difficult or unnecessarily expensive to do business in Mozambique.
Engaging a partner is one way to address the challenges, as partners will handle some of the areas Zimbabwean companies are not familiar with.
Other brands are sending products in bulk but distributors in Mozambique will package in smaller units.
If printing is expensive in Mozambique, local companies may consider sending bulk items together with packaging materials for onward packaging on the market.
Mozambique as a gateway to south-eastern South Africa
Maputo province shares the border with the Kingdom of Eswatini while parts of Mozambique share borders with South Africa.
As such, businesses in Maputo have already established strong ties with companies in the neighbouring towns of South Africa. This makes it a gateway for Zimbabwean products and local companies can use existing relations to introduce products into Eswatini and towns of South Africa such as Mbombela.
Allan Majuru is the ZimTrade chief executive officer.
