Mozambique ready to take more Zimbabwean products
Mozambican largest trade fair, which ends today, is one of the many events that constantly bring evidence that regional markets prefer Zimbabwean products compared to competition.
The Maputo International Trade Fair (FACIM), which ran from 29 August is a multi-sectoral trade promotion events, which 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 the participation of 15 local companies, including women-led enterprises.
Participating companies are drawn from sectors such as processed foods, building and construction, fast-moving consumer goods, processed foods, and clothing and textiles.
Other sectors represented are clothing and textiles, engineering, packaging, furniture, and agriculture inputs and implements.
This is the first time Zimbabwe has had a pavilion at FACIM.
Orders generated at the fair will help grow trade with Mozambique, which is currently the largest the third 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; and tobacco and manufactured tobacco substitutes.
The increased participation of Zimbabwe at regional and international trade exhibitions falls within the current economic diplomacy efforts by the 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 business interest.
It was during these business-to-business meetings that participating Zimbabwean business received notes on best approaches that will ensure their success in 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.
The high quality will make it easy for local products to compete in the market, which has grown accustomed to imports, coming from across the world.
This makes the market a competitive playing ground for those that want to grow exports to Mozambique.
According to Trade Map, the import bill for the 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 edition of FACIM, more than 20 countries participated, which shows the level of excitement that Mozambique has generated across the world.
Although it is a competitive environment, buyers noted the top quality of Zimbabwean products, saying this is an entry point as most products currently in the market are cheap quality.
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 local processed foods and manufactured goods such as sauces, drinks, crisps, and, processed tobacco.
However, issues of quality are one component in the supply mix in Mozambique that local companies need to consider.
Consistence of supply
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 the agreed quantities.
Thus, small business 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 their major competitors from countries such as South Africa, Belgium and China.
Where suppliers are not able to match the prices, they need to ensure that their offerings are well differentiated from what everyone else is supplying
Further to this, companies must fully utilize the existing bilateral trade agreement between Mozambique and Zimbabwe, which is 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 put in place to consistently deliver products to Maputo at minimal costs.
Packaging and labelling
Due to the high volumes of products 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 also important.
For example, the most important element on labelling is 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 they will handle some of the areas Zimbabwean companies are not familiar with.
Other brands are sending products in bulk and 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 in the market.
Mozambique as a gateway to south-eastern South Africa
Maputo province shares the border with the Kingdom of Eswatini and north-eastern towns of 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.
