European economies are facing some challenges and Asian economies are contracting. Africa is the next frontier for investment. What is your point of view on this matter and how do you see Zambia in this context?
Despite many challenges, Zambia has a bright future ahead of it. If you take a look at the last fifteen years, the country has recorded 6.5 per cent GDP growth. It is very impressive for an emerging market. However, Zambia has still a low GDP per capital compare to China. The economy is growing at a really fast pace compare to other African countries. Take a look at infrastructures and construction - in Zambia is still far away from European, American or Chinese infrastructure. Therefor, there is a lot of potential demand for infrastructure.
The steel business is related to infrastructure and construction. As Chinese Company, we have seen great demand and opportunities to come to Zambia. The potential is not only limited to Zambia alone but also to all the neighbouring countries.
The country is a landlocked country with eight neighbours, which are a potential markets for us. We are able to export our products to the neighbouring countries. Zambia is our starting point to reach all these surrounding markets.
In your own word what are the main challenges and opportunities in the steel industry?
As a opportunity in the country, we have a very low level of competition compare to countries like China and India.
However, competition is growing. The major challenge is the size of the market. It is a very small market.
The country’s population is about 15 million inhabitants. Looking at the consumers that can consume and buy steel, the market is very small – about 2 or 3 million consumers. We can explain this by the large number of population living in rural areas and cannot afford steel. There is no middle class in the market and we are looking forward to see the economy grow faster.
Please give us some background and history of Good Time Steel. Also, we would like to know about your operations in Zambia as well as the neighbouring countries.
Good Time Steel was founded in Zambia in April 2005. Our shareholders are from China.
We make steel rolling machines in China. Our shareholders have been working in China for many years in the rolling machine business. We are expert in the steel industry in China and in Zambia.
We started operating our plant in Zambia in January 2008, and so far it has been eight years. Our main plant is in Lusaka’s industrial area and we are going to build our steel depot in Kitwe, and in Kasumbalesa, near the DRC. We are going to put a warehouse there. We are selling to neighbouring countries, but we do not have any office or depot there. We sell through our dealers, which help us distribute to different clients.
Could you give some key figures to highlight your operations -annual turnover, growth rate, the number of employees, and the tonnage you sell per year?
Our production capacity is 50,000 to 60,000 tons per year. So far we only produce 30,000 tons per year largely because of the limited market demand. We have 500 Zambian employees and we have 50 Chinese mainly at management level. Most of our sales are in Zambia, with about 70 per cent of our sales are local, and while about 30 per cent are exports. Our turnover is about US$20 million to US$30 million. We are increasing quite fast, every year by about 40 to 50 per cent.
When we started we were a very small company with about 100 employees, with about 5000 tons as our initial capacity, and at the time, not a lot of people knew Good Time Steel, but we have kept on growing, every year we invest about US$50 million, and we keep expanding every year.
When we began in 2008, we only produced deformed bars, which were our main products, but in 2010, we invested in another production - line-angle bars, and window frames.
Between 2011 and 2012, we introduced another production line; we can now produce round tubes, square tubes, and rectangular tubes. In 2013/2014, we began producing roofing sheets, steel plates with different kinds of steel, so every year we keep on expanding.
What about BSI Steel?
These are our clients. There are dealers and we are manufacturers, so they are not our competitors.
How are you able to follow Universal Mining?
We are employing different strategies that get us bigger day by the day. We have more products ranges. For example, they do not produce steel plates, they do not produce tubes, they do not produce roof sheets, but we are doing all these.
We have diversified because we believe that the market is not very big. Meaning that if you remain with a single line of business, then you cannot grow. It is not like in China where you can venture into the production of one size or one product, but sell at greater volume. This is not the case with Zambia.
Why Businesses & Investors should choose Good Time Steel?
We have the full range of products, while they only have half. This is a great advantage because when people buy steel, they not just buy one type of steel. Instead they want a one-stop-shop where they can get everything they need. We have 10 years of Business Excellency selling a reliable product that can furnish and help other companies grow. We are also a very social responsible company that employs and train Zambia at all the management levels. We are transferring skills and knowledge in this country and the region. We wish to continue in Zambia and become the leading Steel manufacture in this region.