1. BCSDZ ANNUAL CONFERENCE 2011
(2-3 NOVEMBER 2011)
ENDORSING INCLUSIVE BUSINESS THROUGH A SUCCESSFULL PROJECT IN THE TIMBER INDUSTRY By
Dr Joseph Kanyekanye
President – Confederation of Zimbabwe Industries
&
Group Chief Executive Officer – Allied Timbers Holdings

2. Presentation Summary Introduction & Scope
Forestry in Zimbabwe at a glance
Money grows on trees
Challenges experienced
Picture of an Alternative route to Indigenisation
Opportunities for Improvement
Lessons leant
Conclusions

3. Introduction Stability and political unity since 2009
Resource rich country with arable land
Education – unquestionably Mugabe legacy
GDP growth averaging 7% in last 2 years
Come to share, learn and adapt - NOT AN ORACLE
Malaysia palm trees – an inclusive business model based on technology from Africa
This is an objective story of my company and how INCLUSIVE BUSINESSES can improve the bottom-line.

4. FORESTRY IN ZIM. AT A GLANCE
1954 PLANTING OF TREES MOSTLY GUM AND PINE SPECIES
ROTATIONS
RETURNS
INTERMEDIATE PRODUCTS
FORESTRY SILVICULTURE AND DDDs
THINNING TO WASTE TO PRODUCTIVE THINNINGS
TRADITIONAL ZIMBABWE FORESTRY PRACTICE
CONTRACTORS
MAIN SAWMILLERS
Zimbabwe

5. Money grows on Trees
Timber industry in Zimbabwe at a glance: sustainable, free from drought and environmental friendly way of doing business
ATH has the greatest timber resource with 7 sawmills
Concept of contract milling: DDDs concept
Buying of logs initially led to cash flow constraints
Movement towards contract milling
PRODUCT SHARING
RISK OF MARKET DISTORTION
MANAGEMENT OF QUALITY

6. CHALLENGES EXPERIENCED
FINANCIAL DISCIPLINE – FANCY PROJECTS CORPORATE FATIGUE – 35 TO 10 contractors FUNDING – NGOS Failure technical advise needed as most are not trained in business or forestry but have passion for work political warlords – required firm decisions

7. WHAT WAS ACHIEVED
PRODUCTIONN IN EXCESS OF COMPETITORS – 4900M3
VALUE OF $1,2 MILLION PER MONTH
CHEAPEST COST OF PRODUCTION ALLOWING LOCAL DOMINATIONN ONN PRICE IF NEEDED
ENHANCED PROFITABILITY
COMMUNITY COMMONWEALTH
EMPLOYMENT – 300
NEW ENTREPRENEURSHIP
EMPOWERMENT AWARDS

8. AN ALTERNATIVE PICTURE OF INDIGENISATION

9. Opportunities For Improvement
Value addition especially in furniture, pallet manufacture
If you do not buy my timber ……….. we will certainly bury you. Opportunities for further value addition
Training in sawmilling and entrepreneurship in modules
Chain of custody to deal with timber poachers
SME Financing models – CABS model is most ideal
Exchange programme: an opportunity arose to look at this in South America
Government incentives in the form of tax credits, rebates and subsidies
Government guarantees for accessing funds
Commodity swaps; raw materials for machinery or product sharing

10. Lessons learnt
An alternative road map to indigenisation via new enterprises
Product sharing
The virtual organisation
Community empowerment on strictly market principles
Alternative path to enhancing productivity
Scope to expand this to other areas such as transport
National growth strategy anchored on SMEs is possible
Inclusive business can be profitable – publish success models and replicate

11. Objective optimism anchored by resource index.
CONCLUSION
Building blocks for inclusive businesses are market based principles
Funding and more funding needed but new approaches besides FDI can arise from using SMEs
Objective optimism anchored by resource index.
Africa its is our time!

12. ‘I am not smart, I spend more time on the problem than other people" - Albert Einstein
THANK YOU 12