Zambia: Interview with Rosetta Chabala

Rosetta Chabala

Chief Executive Officer (ZAMEFA)

Rosetta Chabala

The Worldwide Economy is currently facing some challenges. However, economists seem to be thinking that Africa is becoming the next destination for foreign investment. What’s your opinion on that and how do you see Zambia within this context?


Zambia is actually well placed and it has many interesting opportunities, but with so much of it untapped. In terms of Natural Resources, Zambia has about 40% of the waters in the SADC region (Southern African Development Community), and a small population against its vast land, most of which is arable. We have copper and other minerals and Tourism is also another focus area, which has potential to grow beyond what we currently have, since I do not think we have done everything that can be done in terms of Tourism in this country. When it comes to manufacturing, the industry has grown: it was contributing lately to about 26% to the national GDP and we are now backing to about 10 or 9%. It simply means we have quite a lot of potential to grow obviously if the environment is supporting and the regulations and legislations are as well.


Now that you have mentioned the Manufacturing Industry in the country, what would you say that are the challenges and opportunities?


Prior to the country changing to multi-party in 1991, there was initially an import substitution. However, after the liberalisation of the economy, public companies were privatized and collapsed. Out of most of the companies that were privatised, we only boast of companies like ZAMEFA that are still operative.


ZAMEFA was only privatized in 1996. Could you tell why it took so much time to privatize the company?


It is true that many others were privatised much earlier than us and, on the other hand, some of them had not made it in into 1996. Public companies were very inefficient and carried quite a lot of debt. When some of these companies went into private hands, the new owners felt that they were not earning enough in terms of business and therefore they decided to pull out


During the ten-year era of president Chiluba, everything went into trading and there was very stiff competition. Indeed, these companies could not withstand competition and they found it very difficult to stay in the market. Currently, the structure of the manufacturing sector is not really well packaged. Despite a lot being done, most of these are small to medium scale businesses that are not captured formally.


How is the company structured ?


Within ZAMEFA, I am responsible for the whole unit, but with the American system that we use, we work in a matrix system. Beyond me, we have a regional structure, because we are trying to run the businesses as a region in Sub-Sahara; there is a distribution centre in South Africa, so the businesses run as a regional business at regional level.


So at that point, I am part of the regional group that makes strategic decisions for the region, and at the same time responsible for the unit in Zambia. Some decisions are made locally, but those that impact on the region are made regionally. We are also report to Europe, and some level of decisions are made by the CEO for Africa and Europe.


When it comes to our services, we only have one manufacturing plant which is in Luanshya, opened in 1968. The company employs about 360 employees in Luanshya, with quite a number of contractors on site. We are indirectly offering about more than 300 jobs, some of them working with machinery, and some others working with scrap. Basically we are in Luanshya, a few kilometres from the mines and we get copper from Mopani Copper Mines Plc and Konkola Copper Mines.


The proximity to the mines gives ZAMEFA competitive advantage compared to countries that have no copper. At the Luanshya plant, ZAMEFA manufactures copper rod, which is a raw material for the cable, and they also have a manufacturing plant. We have a casting plant and a cable plant and the product that comes from the casting plant is fed into the main plant to make the different sizes of cable.


This year the company expects to grow by between 20-25% because of the machinery that has been installed. This will give ZAMEFA the capacity to produce more and it will also give us a little more efficiency. The only problem is the market drives-there are so many rod manufacturers, so even though you produce tons, if the market is depressed, you have nowhere to sell it.


Copper is not normally manufactured in Zambia. Currently, is ZAMEFA one of the only Zambian companies that add value added copper?


ZAMEFA is indeed one of the companies that adds value to its copper. Of course there is competition trying to cope up, but it is heavy and hard when it comes to cash because one needs to have enough economic resources to buy the copper and accessing it from the mines. You need to see if the mines can give you a bit of terms, otherwise you depends completely on the banks.


How do you explain the fact that ZAMEFA is the only copper cable producing plant when the country is specialized in the production of copper?


There has been quite a lot of debate on this and at some point the World Bank did and extensive study. Although they think we really cannot add value to copper because the would-be customers in terms of economies of scale are not here, we actually add value to copper in different forms, and we really have to export to China and other countries.


Not a lot of people have ventured in this business. We are able to access cash because we have a parent guarantee like General Cables but, normally, you cannot access cash without that if you have to depend on the banks. This is a sector that requires the big ones to come in order to make it possible.


Even if the World is developing fast in social terms, there are not a lot of women in influential positions. How does it work for you? Is it more challenging?


Yes, it is challenging. I am in a sector that is male dominated - the Engineering Sector. Even when you go to ZAMEFA, out of the 360 employees, you have 35 women. So you can just see that women in this sector are trying to force themselves because there is more than 90% of men and a little per cent of women. This is a good challenge because it shows that women are still capable. There is nothing magical about engineering or being in mining. Basically, all you have to know is to understand the sector.