The right information is worth much more than money

Comparing notes in Pretoria

 

I took this photo this past Saturday at a piggery project being run by a black South African sister at her plot outside Pretoria. The sister is raising around 1 000 pigs per year. What I have learnt in about 19 years of trying out new ventures is that the right information can be worth much more than money because with the right information you can make money and with the wrong information you can lose all your money. On 2 October 2017, I resigned from my job here in South Africa after 10 years of working at the same level and I wanted a change. I took a bus from Pretoria to Harare that same evening. My idea was to try and manage my piggery project hands-on, we had already invested over $20 000 in the project. I also wanted to grow tobacco on my own since I was not happy with how my cousin had managed my tobacco crop in the previous farming season. I got home in Harare the following evening. On the next morning, I went with Mr. Mereka Maruwira to my piggery project in Chivhu. I have known Mereka since 2002, when I first employed him as a shop-keeper on my very second ever shop that I opened at the farm where his parents had been working in Virginia commercial farming area of Macheke next to our village in Mukarakate communal lands in Murehwa. Around 2001-2002 the farm was allocated to black farmers during the land reform exercise. I would be the first person to open the farm shop after the exit of the white farmer.


Mereka is now a brother to me as over the years, he has been involved in almost all ventures I have tried from managing my lorry, buying and selling cattle for me, going to open and managing my market gardening project at a plot in Kensington, Bulawayo, also coming to South Africa and we have started new ventures, helping to construct our house in 2009, staying at my house in Zimbabwe after we kicked out the last lodger for non payment of rent and now assisting with managing my piggery project. When we got to my piggery project in Chivhu, the worker a son of my wife's cousin was not expecting us. I have also learnt that when it comes to business it is better to deal with strangers and not relatives as it always end badly. The worker told me that feed had run out the previous day and I asked why I had not been told before hand. Around 100 pigs were almost starving, luckily I had brought a sack of vegetables that I had taken from my garden at our house in Zimre Park. I let Mereka do the talking as I was already agitated due to lack of sleep. When Mereka asked if we could get makireshi (maize bran) at the local grinding mill, the worker said there was none and the nearest place we could buy was about 15km away. We then walked to the nearby business centre and we managed to buy 2 sacks of makireshi for about $4 a bucket and that was going to be enough for a day.

 

We then went back to Harare, the following morning we boarded a bus to Mutoko to see my cousin. 3 years ago when I became a partner in the piggery project before taking over full ownership of the project in January 2017, I had spent almost $2 000 to buy and transport a grinding mill machine and left it with my cousin in Mutoko. All I was interested in was to get cheap maize to feed my pigs. Most farmers cannot afford the $1 or 50cents charged to crush a bucket of maize so they rely on batter trade where they will give you a 5 litre tin filled with maize in exchange for the grinding services. During harvest season when maize is in abundance you can increase the charge to 2 tins and you can easily get more than 100kgs of maize per day. When I got to my cousin's place and I asked how much of my maize he had, he told me he had none and he told me some story. I was livid and I kept my emotions in check and decided to take a nap for a few hours and calmed down. It did not make sense that after a whole year, I would be getting such an answer from him. 

Ready to leave Mutoko

At Siyaso, Mbare

Along Mutoko road at Corner Store

 

In my experience ever since I left Zimbabwe in August 2007, when it comes to investing in projects in Zimbabwe,the biggest challenge has been dealing with relatives and workers and not necessarily the economic situation in Zimbabwe. Initially when I started working in South Africa, I was disappointed in the lack of career advancement. South Africa is a complex place where due to racism even black African citizens struggle to get ahead however black citizens can at least benefit due to employment equity. As a black foreigner, I do not qualify for employment equity and many established companies would not consider a foreigner. At times, I would go to the so called interviews where interviewers would not even talk about your qualifications and you would be wondering why you were called in for the interview in the first place. Coupled with the lack of prospects as well as the nightmares that came with dealing with Home Affairs department in trying to renew work permits, I realized within three months that I had to work on sorting out my stuff back home starting by building a house. Towards the end of 2009, I had managed to save some money to begin building our home. I took leave from work and drove to Zimbabwe, pitched up a tent at our stand and started buying building materials and interviewing potential builders.Luckily my first job after High School was as a building studies school teacher at secondary school level.

Around 2001 before we got married, both me and my wife we were working for separate financial institutions in Harare and our employers where assisting with housing loans. We then identified two separate houses in Glen View high density suburb in Harare that we needed to get mortgage finance on. When the valuators from the two banks went to inspect the properties, both properties did not pass the test as construction quality was so poor and both banks refused to bond the properties. I have seen many people based outside the country, they send money to their relatives in Zimbabwe. Some of them misuse the money completely and others will still do construction but use sub standard material. I monitored the construction during my leave and left when the house was above window level. My wife and kids then went back to Zimbabwe in early 2010 to monitor the rest of the construction. In January 2011, we started renting out the house and I also constructed started running a tuck shop at our house and my wife and I would alternate travelling to Harare to monitor the shop.




End of 2011, I started a broiler project at the house and I would visit Harare every weekend of December 2011 to monitor the project. On 25 December 2011, I arrived in Harare and the workers told me that they were battling to find market. I then drove to Mbare Musika and I came with guys who bought 300 birds cash. I then went to Chitungwiza and secured market for the rest of the almost 300 birds and the customer wanted them dressed. I was going to be on duty on 27 December and I instructed the workers to slaughter the chicken and deliver to the customer and I drove back to South Africa on Boxing Day. Unfortunately they did a hurried job in preparing the chicken that all the chicken went bad and we had to throw them away and I lost a lot of money. I then stopped the project.


The business environment in Zimbabwe is very challenging for example the shortage of cash but that can be managed.The high prices in Zimbabwe cushions you when you have to convert your money into hard currency. The current high prices are as a result of the Bond note currency which in my view is causing more problems for the economy and must be discontinued, in December 2017 I wrote the following article and I still stand by those views. http://kanyokad.blogspot.com/2017/12/why-zimbabwe-needs-to-discard-bond-note.html. For example the prices of maize being offered in Zimbabwe to farmers is $390 per tonne and compare that with approximately R2 086.00 being offered in South Africa according to Grain SA. Soyabean producer price in Zimbabwe is pegged at $780 per tonne compare that with R4 460.00 in South Africa. The price of fertilizer in Zimbabwe is about twice the price in South Africa however the other inputs especially labour is much cheaper in Zimbabwe. Over the weekend when I was discussing with South African sister and she was complaining that the producer price per kilogram for pork was around R20 and I was telling her in Zimbabwe the producer price can be almost $4 and it is easier to open your butchery where you can sell for up to $6 or more depending on supply and demand. Also in South Africa, they have to buy all the feed from the shops as there are no communal farmers selling maize cheaply. I mean most South Africans have not seen chigayo (grinding mill) in their life. When I told her that in Zimbabwe you can buy sunflower cake for around $100 per tonne from villagers, I really gave her an idea.

In my experience the biggest challenge has been dealing with relatives in Zimbabwe when it comes to money. Towards the end of 2010, my wife left $1 000.00 with a relative in order to pay for plumbing as well as our sons' school fees. The next week, we got a phone call that our sons then aged 8 and 6 where left on their own and they were not going to school and the relative had ran away with the money. Then end of 2011, there was the problem with almost 300 chicken going bad because people did not care. That is the reason why at least one of us has to go to Zimbabwe every two weeks so that we would buy feed on our own as it becomes difficult to trust anyone with money. Towards end of 2016 almost $2 000 was paid to a relative from the butchery that had bought pork from us and when I went to Zimbabwe in December wanting to buy fertilizer for my tobacco and the money had been used and I had to swipe my SA bank card to buy fertilizer. I don't want to talk about how badly the tobacco was managed from the word go. Many people in Zimbabwe are short sighted in that if they could manage funds well we could mutually benefit in that in countries with better economies, the salaries are much higher and also it is easy to get credit at much better terms and we can fund even bigger projects back home. The idea is that you need to have a working project back home before you decide to relocate and to do that you need to raise as much capital as possible for the business.



Anyway back to my story of October 2017. We then walked about 4kms back to the business centre where I used to run one of my three shops from 2004 until I left for South Africa in August 2007 during the infamous price control blitz of 2007 and then resuscitated the shop again in early 2008 before realising that it was difficult to run a shop all the way from Pretoria. I started to enquire and I managed to buy makireshi for $1.5 per pucket and this was much better than $4 that was being charged in Chivhu. That evening I managed to buy 2 tonnes and also some sunflower cake. The next day, my brother in-law came with his two tonne truck and we managed to carry the feed to Chivhu. I then went back to Mutoko and I spent almost a week walking from one grinding mill owner to the other and managed to buy another 4 tonnes of the feed and a friend offered to transport for me for free to Corner store along Mutoko road. A Malawian truck driver on his way to Masvingo Province agreed to carry the feed for me to Chivhu for R500. I had enough feed to last 6 weeks so I started looking at tobacco farming. In October 2017, the bond note was devaluing very quickly and the price of fertilizer was going up. I went to Mutoko and I was offered seedlings enough for 2 hectares. I was sceptical of sending more money to Zimbabwe. I decided to skip growing tobacco this past season. In December 2017, I went back to Mutoko and bought another load of makireshi again and transported it to Chivhu.

Price of fertilizer in October 2017, Harare, Zimbabwe

 

Towards the end of October 2017, I had about two dozen pigs ready for market and I struggled to get buyers for the pigs. The economic prospects in Zimbabwe were very bleak. I came back to South Africa and the next week Robert Mugabe fired his deputy and I thought things can't get any worse. In early November 2017 we visited my brother in law outside Pretoria where he is doing market gardening growing vegetables normally bought by Zimbabweans in Pretoria and Johannesburg. I told him that I was considering establishing a piggery project in South Africa and then close the one in Zimbabwe and he took me to this plot to see what the South African sister was doing. At the plot, I was stuck by the housing that she had for the sows (female breeding stock), back home we were struggling with housing for soars because if you put more than two together they started attacking each other but this lady could put almost 40 soars in one pen. When Robert Mugabe resigned around mid November 2017 things started looking-up back home, another day I got a phone call from a guy who wanted to buy all my pigs and I said no I was no longer selling.

 

 Last weekend we were in Zimbabwe and we had sent fencing the previous week and we tried to explain the kind of pen they must now construct since number of our breeders has also gone up. The more we explained what kind of pen we wanted for the breeders the more people got confused. So mid last week, I bought a bus ticket for Mereka to come to Pretoria and on Saturday we went to the plot so that he could see the plan. We had a very fruitful day as the lady managed to share with us a lot of practical information. When you are running a project or want to start running a project, it is very important to read a lot of information about the project and also visiting those who are already running a similar project as  you will get insight. In English there is a saying, "You do not need to re-invent the wheel", in Shona we have similar sayings such, "Kugara nhaka huwona dzevamwe" , or "Nherera teerera panorayirwa mwana wamambo".

To show the value of information. In early 2007, I was working as a branch manager for an insurance company in Bulawayo. Due to the economic crisis in Zimbabwe, which can be traced back to 1997, for a long time salaries could no longer match inflation and a lot of people already had side businesses that ended up paying more than their salaries. At that time, I was running three general dealer shops in the resettlement areas of Mutoko and Virginia Macheke. The Zimbabwean manufacturing industry was already on its knees and most of the goods we were selling in the shop was coming from Musina, South Africa. On this particular weekend, I had left work on Friday after lunch and drove to Francistown in Botswana where I would buy clothing and shoes for resale. On the Saturday  morning, I had gone to Musina to buy cartoons of cooking oil, soap, petroleum jelly etc. I left my house in Bulawayo around 3am on Sunday morning driving to Mutoko about 600km away and I would come back during the night as I would be on duty the next day. I gave a lift to a number of people whom I gathered were coming from shopping in Botswana.



During the trip, we started talking about a number of things, I always like to discuss with strangers as I get to learn a lot. Before we got to Gweru a guy was going to drop off and he asked me in passing if sugar beans was available in Mutoko as that year there was a big shortage in Bulawayo due to the fact that the irrigation schemes in Masvingo that normally supplied Bulawayo had been hit by a drought. He then gave me his numbers. When I reached my shop in Mutoko that morning, I remembered the conversation and farmers would come around the shops selling their sugar beans and I managed to buy about 4, 50kg sacks. The following day when I was back in Bulawayo, I contacted the guy to say I had brought him the sugar beans and he started giving me the run around. I then started researching the market and I could see that some companies were offering me about 6 times what I had bought the sugar beans for. I finally settled for a company called Quality Foods and this company was supplying the in-house brands for the major retailers such as OK Zimbabwe and TM supermarkets.The following week, I took leave from work and spent a week buying sugar beans in Mutoko and I managed to get about 5 tonnes and I was able to borrow a trailer and with my company issued Toyota Hilux double cab, I transported the sugar beans in three trips.
 

By the time we went for the Easter Holidays, I had made around R100 000 from thin air and I managed to use about $3 000 to buy myself an Isuzu pick up and the rest against the advice of my wife who warned me about putting all my eggs in one basket,  I invested into my shops and once every month, I would drive to Johannesburg and buy expensive stock wanted by farmers eg solar panels, radios, batteries, kitchenware etc. Every week, I was now making sales of around R25 000.00 and that was a lot of money in Zimbabwe. My salary as a branch manager was only averaging about R1 000.00 even though we were getting monthly increments, however the salaries could no longer match inflation. One of the reasons I had kept on going to work was that I had the use of the company bakkie and now that I had now bought my own bakkie, I decided to resign from my job and start serving the three months notice. I was going to concentrate on my shops, my minibus taxi, my 7 tonne truck that was contracted to carry cotton crop and my market gardening that I was pursuing in Kensington Bulawayo.



Whilst I was serving my notice, the government introduced the price control blitz to try and tame inflation and overnight we incurred heavy losses and the lady managing my businesses was also arrested and she was fined. At that time many people were applying for work permits to come to South Africa at first I was reluctant and my wife encouraged me to apply. The day I collected my work permit at South Afrian embassy Harare, we drove overnight to our house in Bulawayo to collect my certificates and we immediately left for Pretoria and within a week, I started working in South Africa and I opened a new chapter in my life.



Some people have said the current time we are living is one of the best throughout human history and I tend to agree. I remember when I was in high school during the early 90s we did not have internet, if you wanted information you would need to read the whole book just to get a concept. Nowadays there is so much information for example you can go to Youtube and you will see a practical example on how to do something. In the past you needed to physically engage with a mentor but now with the internet and social media, you can easily follow an accomplished business leader such as Strive Masiyiwa and you can begin to learn a lot from him even though you might never meet him in person. Another important issue is to learn as much as you can about business management. In late 2005, my employer funded for my studies in order to pursue the three year program that would lead towards an MBA through Open Learning Centre in Harare. I managed to complete one module before I dropped out. What I learnt in that module when it came to competitive advantage was so life changing in that I managed to apply it to my own personal business and it grew.  



Back to my current situation with our piggery project, I get to visit farmers who have successful projects and I learn practical examples from housing, markets, getting lower feeds etc.