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TANZANIA cannot shell all cashewnuts produced in the country and must export raw cashewnuts, Parliament was told yesterday.

Responding to a question by Mtwara Rural MP Abdillahi Namkulala, the Deputy Minister for Cooperatives and Marketing, Hezekiah Chibulunje, told the House that there were presently 12 factories which the Cashewnuts Board had inherited from the Tanzania Cashewnuts Authority. However, only the Kibaha and Masasi plans had been rehabilitated.

The MP had wanted to know why the government does not force exporters of cashewnuts to shell them in the country. 

Chibulunje said each of the two factories had the capacity to process 10,000 tonnes of raw cashewnuts annually and added that three other private factories could shell 15,800 tonnes annually.

He said that all factories were currently operating below their capacity.  

About 95,000 tonnes of cashewnuts were produced in the county in 2002/03, but the Kibaha factory shelled only 380 tonnes, Masasi 800 tonnes, Premier Cashew Industries Ltd 5,140 tonnes, MO Cashews Ltd – a Mohammed Enterprise Tanzania Ltd (METL) sister company – 480 tonnes and OLAM (T) Ltd 550 tonnes.

He said the Government was working to attract more investors to the cashewnut sector.

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Tanzania takes measures to boost sisal farming

The Tanzanian government has taken the initial steps to revive the sisal sector by privatising most of the country’s sisal farms and sisal-products manufacturing firms.

The Tanzania Sisal Board is now working with regional authorities to revive sisal farming in areas such as Morogoro, Mtwara, Mwanza, Mara and Shinyanga.

Tanzania was one of the largest sisal producers in the world, producing up to 230,000 tonnes annually in the 1960s.

However, after nationalization of sisal farms in Tanga, Morogoro and Kilimanjaro in 1967, production dropped, declining to 20,000 tonnes by 1998.

The government’s determination to revive the sector now faces a major challenge from the importation of jute bags.

The Ministry of Agriculture and Livestock Development has been criticized over the importations, which have been going on for the past four years.

Tanzania has the capacity to produce about 16 million sisal bags annually at two privately-owned factories in Morogoro and Moshi.

TPM (1998) Ltd of Morogoro – METL's  sister company – has been forced to produce below capacity because the jute bag imports have saturated the market.

The Confederation of Tanzania Industries (CTI) says that imported jute bags sell at about TSH 400 (55 US cents) per bag, while locally produced sisal bags sell for between TSH 1,000 and TSH 1,560 ($1.50 and $ 2.50) per bag depending on size, excluding value added tax.

 A local business conglomerate – Mohammed Enterprises Tanzania Ltd (METL) – has invested heavily in sisal manufacturing in various regions of the country after taking over TPM (1998) Ltd after its privatization in 1998.

METL is the only manufacturer of sisal bags, sisal cloths, jute hessian bags and jute hessian cloth in Tanzania.

The Morogoro factory’s production capacity stands at 10 million bags per annum while Moshi mill’s production capacity stands at six million bags per annum.

Sisal bags and cloths are manufactured by treating the fibre with vegetable oil, making them suitable for packaging food materials.

TPM (1998) Ltd factory General Manager Edmund Myava said with the anticipated demand that, of three million bags, the Government could earn the Tsh 620 Million TSH ($775,000) in VAT, Tsh. 10 Million TSH ($12,500) as industrial levy and 10 Million TSH ($12,500) in produce. Mr Myava also pointed out that the unit has also managed to attain standards conforming to the specifications of organizations such as the Association of Chocolate, Biscuit and Confectionery Manufacturers, the International Jute Organization and the International Organization of Cocoa, Coffee and Confectionery.

The firm has already produced one million sisal bags emulsified in vegetable oils, instead of mineral oils, in line with international health requirements for packaging cocoa and coffee beans, shelled nuts and cloves for export and the local markets.

Sisal bags are superior packaging materials because they are made of biodegradable hard fibre, are stronger, reusable and protect the packed contents by not absorbing moisture.

Mohammed Dewji, Managing Director of METL, said that Government intervention was necessary to promote the use of sisal bags, through the introduction of a comprehensive incentive package.

‘It is necessary to reduce the high cost of production if we are to compete internationally, by reducing taxes on diesel, power tariffs and payroll’ he said.

The sisal industry currently employs 15,000 workers and supports 75,000 people. TPM (1998) Ltd employs 450 workers at both its Morogoro and Moshi mills combines.

In the 1970s, Morogoro region was one of the most important industrial growth centers in the country, but between 1988 and 1999, the region had only 19 medium-scale and 100 small-scale industrial enterprises.

Morogoro is the third largest region in the country after Arusha and Tabora, covering an area of 72,939 sq km, or about 8.2 per cent of Tanzania mainland’s total area.

The region serves as a lifeline between Dar es Salaam and other regions by virtue of the rail and road links that traverse it.

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METL mentioned in book by Georgetown Professor
 

Name of Book:

The Travels of a T-Shirt in the Global Economy. An Economist Examines the Markets, Power and Politics of World Trade

Author:

Pietra Rivoli, Associate Professor at Georgetown University’s McDonough School of Business

Publisher:

John Wiley & Sons, Inc., Hoboken, New Jearsey; May 2005

Reference to METL:

pgs.  196-198; 200, 202, 205.

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Bags firm pleads for Govt support

TPM (1998) Ltd, a bags manufacturing firm located in Morogoro with a branch in Moshi, and owned by Mohammed Enterprises Tanzania Limited (METL) would increase its production and meet local demands if the Government provided it with full support.

Speaking to The African yesterday in Dar es Salaam, METL Director for Agriculture, Dr. Nallakutty Subbaiah, said that there is a need for the Government to increase moral and material support to Tanzanian manufacturers so as to enable them to compete with other manufactures from the developed world.

He said TPM (1998) Ltd has the ability of producing bags that could meet local demands, which is 60 million bags per annum, but the Government insists on importing subsidised jute bags from outside which compete with bags produced locally.

He however pointed out that lack of local market at present forces the industry to produce only 10 million bags per annum while the factory has the capacity to produce more.

He added that METL has 10 sisal farms located in Morogoro Chalinze, Tanga, Kibaha and Same that provide enough raw materials for the industry, Hence, no one can pose a challenge that Tanzania has a lack of raw materials for producing sisal bags.

Dr. Subbaiah said that the company invested a lot of money so as to make changes that could meet local demands and challenge imported bags, but what remains is the support of the Government whether by imposing tariffs on imported bags or subsidizing local industries.

He said the industry has provided employment to more than 35,00 local people adding that it could provide more room for employment if the government increases local markets.

However, the Government has said that it will continue to import sacks abroad due to inadequacy of the local production.

Speaking to The African yesterday, the Principal Secretary in the Ministry of Cooperatives and Marketing, Dr. Ladislaus Komba said that sacks produced by local industries are not sufficient for the local market.

He also said that the locally produced sacks were more expensive than those imported and thus more customers would tend to buy cheaper ones. Dr. Komba went on elaborating that local production expenses were very high.

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Tanzania champions Simba SC yesterday received kits from Mohammed Dewji, the Managing Director of their official sponsor’s Mohammed Enterprises Tanzania Ltd (METL).

Club chairman Ayoub Chamshama was handed sets of jerseys, tracksuits, boots and balls for the players to use as they prepare for the international and local championships.

Simba will at the end of this month play Ferroviario of Mozambique in the CAF Champions League preliminary round in Dar es Salaam.

The team, which is now under the guidance of former South African national team coach Trott Moloto, is also preparing for the East and Central Africa Club Championship that will be played in Tanzania in April.

Dewji is also responsible for paying the salaries and allowances of the coach, who was signed to replace Zambian Patrick Phiri.

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TO LIVE is to change; and to change is to be perfect, the Managing Director of Mohammed Enterprises Tanzania Limited (METL), Mohamed Dewji, regularly makes that dictum.

For his part, the Chairman of METL, Gulamabbas Dewji, says: to change and to grow is a way of life. With this philosophy, we have come a long way in our 30 years of entrepreneurship in Tanzania.

The desire to change and to grow has for METL gathered special momentum during the past five years. This is due in large measure to the enabling and business friendly environment created and sustained by the Government of Tanzania

The cumulative effect of the trust is that METL has earned among its customers during the last two decades and a dedicated and loyal workforce. ‘These are the pillars on which will continue to build and grow’, Mohamed says.

The winds of change are blowing right across Government departments and agencies, with their desire to promote and support private enterprise in Tanzania.

METL is committed to live up to the Government’s expectations by investing in varied business enterprises, generating revenue for the Government and jobs for the people.

The organization continues to retain its leadership position in the import and export business, and is continuously looking at various opportunities in the manufacturing and service sector in Tanzania.

Moreover, METL will continue to deliver quality products at competitive prices to consumers – and this way, continue to deserve the trust that the customers have in its ability to do so.

‘We realize and continuously remind ourselves that, without our customers’ support, we would not be where we are today. Satisfying our customers’ needs is both a duty and a key element of our strategy to grow further’, Mohamed says.

METL history started in the early 1970s when it was essentially a trading house.

Presently, METL is emerging as a multifarious business conglomerate with interests in import and export, products distribution, agriculture and manufacturing.

Today, the firm has twenty-seven branches spread all over Tanzania and some 40 sales outlets (both wholesale and retail) scattered across Dar es Salaam. The network places METL in a unique position, giving it competitive advantage in its commodity procurement and products distribution activities.

With over 5,500 employees, the organization is said to be among the largest private sector employers in Tanzania.

On the other hand, it is said to be one of the largest procurers and exporters of commodities from Tanzania.

Not only that, METL is also one of the largest foreign currency earners in Tanzania through its export activities.

In addition to that, it is a major source of revenue for the Government in the form of taxes and duties.

Tax contributions to the Government over the past five years exceeds TSH 25 billion.

It is a leading processor and distributor of essential commodities in the country.

The company is committed to be a responsible corporate citizen sensitive to the communities and environments in which it operates.

METL's future aspirations are not only in the process of consolidating the gains it has made in its core competencies, but to also continue making forays into new areas.

The main goal will be to continue identifying ideas and challenges, and converting them into opportunities and success stories.

The entry into oil refining, soap manufacturing, textiles and cassava is part of this conscious desire to expand, diversify and succeed.
 

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Mohammed Enterprises Tanzania (METL) has rightly recognized the versatile nature of sisal fibre as an industrial raw material and seriously expanding its sisal fibre processing capacity, Business Times has learned.

METL Managing Director, Mohammed Dewji, said traditionally sisal fibre was only used for making twines, ropes and carpets.

‘These limited applications led to the decline of the sisal industry all over the world because of substitution by cheap synthetic materials like nylon and polypropylene’, Dewji explained.

Now, with the invention of new applications for sisal fibre in the building and automobile industries, as well as in road construction and the metal industry, the demand for sisal fibre is growing day by day.

‘Being a natural biodegradable material, sisal is environment-friendly and is the strongest and lengthiest of all the natural hard fibres’, he said.

Tanzania has fallen prey to the industrialized nations, exporting many primary agricultural produce, instead of adding value to them locally and exporting the resulting products.

Noting that the sisal fibre processing capacity in Tanzania is currently 75,000 tonnes a year, Dewji said this is three times more than the current total production of sisal in the country!

This notwithstanding, the Managing Director said, it is surprising that Tanzania still exports nearly half of its sisal production as raw fibre while the value addition facilities that exist locally remain idle!

METL is facing constraints in using all the available secondary grades of sisal fibre for making sisal bags in their Morogoro and Moshi mills (TPM (1998) Ltd), largely because of unfair competition from subsidized imports of jute bags. That is why the group is concentrating on the value addition of primary grade sisal fibre.

METL now owns a sisal spinning plant, 21st Century Holding Limited located in Changombe in Dar es salaam. The plant is being modernised and expanded to enable it to produce high value very fine yarns for the international market.

According to Dewji, the expansion programme is expected to be completed this July, after which its capacity will be tripled and the manpower requirement doubled to 250 workers.

The Managing Director said that the supply of good quality sisal fibre to 21st Century Holdings is assured from the ten sisal estates that are owned by the group in Tanzania.

He also noted that the integration by METL of agricultural production with agro-processing capacity helps the group to produce high quality sisal yarn, which is strong, clean, and is also water and temperature resistant.

‘These characteristics make the products ideal for applications like floor and wall coverings, polishing cloth, elevator ropes, etc’. he noted.

He said the planned installation of a modern dying plant will provide a wide range of quality products as required by overseas buyers.

Dewji noted that a much diversified market base has already been created, which includes Japan, South Korea, Indonesia, Taiwan, India, Belgium, Italy, Denmark and the Yemen.

‘The key ingredient to success in overseas markets is in meeting the required delivery schedules, and supplying products of dependable quality’, he explained. ‘Every buyer wants his supplies always on time, and does not want to know your daily local problems.’

To address one of the major problems at the sisal spinning plant at 21st Century Holdings Ltd, he said, that the unit has already installed a 640-KVA generator to make sure that production is not disrupted by power interruptions and, hence, shipment schedules are completed in time.

METL has been steadily increasing employment opportunities in the sisal industry in Tanzania by replanting new areas in their sisal estates. This, experts say, will have a multiplier effect on the economy as a whole, including value-addition to fibres.

Dewji noted that METL management is contemplating further investment opportunities with diversified sisal products.
 

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SIMBA Sports Club’s chief sponsor, Mohammed Enterprises Tanzania Limited (METL) yesterday unveiled over 100 M TSH sponsorship deal with the club for 2004/05 season.

The club leadership also took the opportunity, during the press conference, to disclose their plans to list the club at the Dar es Salaam Stock Exchange (DSE).

METL Managing Director, Mohammed Dewji told reporters that the package would be signed in two weeks time after finalizing some logistical arrangement.

‘In principle, we have agreed to sign with Simba a one year contract the details of which would be given during the official signing ceremony in two weeks time’, he said.

Dewji, whose organization has been Simba’s chief sponsor for five consecutive years, said he had decided to renew the contraction order to motivate the players ahead of their Africa Champions league match against Zambia’s Zanaco at the National Stadium in Dar es Salaam tomorrow.

He said he intended to mobilize more companies to join him, saying football was a business that needs heavy investment if a club was to succeed.

Dewji said revenue from gate collection was inadequate in meeting Simba’s needs financially, calling on club fans to turn out in big numbers to contribute to the club’s financial well-being.

However, he said if the club wanted to end its perennial financial problems, there was a need to go commercial.

He said this could be done by giving chance to club members, fans and other stakeholders to contribute through the purchase of shares and investment.

Giving an example, Dewji said his company was paying 30 M TSH annually to the club head coach, Patrick Phiri.

He said unless Simba worked on sustainable investments that would take care of such expenses in future, a time would come when the club would not be able to obtain the services of top flight coaches.

He was optimistic that once the club is commercialized with proper vision and mission, Simba would be able to win the continental club title.

Dewji said due to the cash deficit the club faced last year during the Africa clubs champions, his company was still owed over 56m/- by the club in form of transport guarantees it extended to the club.

The club chairman, Ayoub Chamshama, said they were working on the possibility of listing the club at DSE.

He said once that is done, everybody would be allowed to purchase the shares even if he or she is a Yanga fan as long as at the end of the day it is the club, fans and players who would benefit.

‘There will be no demarcation for the purchase of the share, as our objective would be to enable Simba to be a financially viable club, hence improve its performance in the continental tournaments’, he said.
 

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CONTRIBUTION of local investments to the country’s economic growth is enormous despite massive influx of foreign capital. In this interview, our Staff Writer, Judica Tarimo spoke to the Managing Director of Mohammed Enterprises Tanzania Ltd (METL), an organization that have invested a lot of capital to propel the country’s upward growth. Excerpts:

QUESTION: Briefly, tell us the background of METL.

ANSWER: METL has a long history, which dates back to the early seventies. Essentially, they started its operation in Tanzania as a trading house, and moved slowly-one step after another. As we are talking now, METL is increasingly emerging as a multifarious business conglomerate. Today, this runs multiple businesses ranging from trading to manufacturing, from agriculture to distribution.

Q: How extensive is METL operation network in Tanzania and across the east African Region?

A: Of course, we have an extensive operation network throughout the country and within the city. Currently METL has twenty-seven branches that spread all over the country, and some 40 sales outlets within Dar es Salaam. This network places it in a unique position, and gives the competitive advantage in its products in terms of commodities procurement and products distribution activities. We have also operational branches in Uganda, Rwanda, and Burundi, neighboring Mozambique and London, offering best and quality products and services.

Q: What is METL contribution to the country’s economy and the lives of Tanzanians in general?

A: At the moment, it has created jobs for over 5,500 people, who are employed in various companies throughout Tanzania. In other words, it is one of the largest private sector sources of employment in the country. When it comes to the trading business, METL is one of the largest procurer and exporters of commodities from Tanzania thereby making it a key foreign currency earner for the nation. METL is also one of the leading processors and distributors of essential commodities in the country. On top of that, METL is a major source of government revenue in the form of taxes and duties. Latest statistics show that, METL tax contribution to the government over the past five years exceeds some 20 billion TSH.

Q: How do you grow or operate under the circumstances where business competition becomes stiffer, day in day out?

A: METL believes that change and growth are a way of life. With this philosophy in mind, it has made an extra effort to offer quality products at competitive or reasonable prices to its customers. We always remind ourselves that without our customers’ support, we would not be where we are today. We always struggle to maintain the trust that the customers have in our company. We believe that satisfaction of our customers’ needs is both a duty as well as a key element for METL strategy to grow further.

Q: To what extent are you committed to support the country in the context of corporate responsibility?

A: METL is extremely committed to be a responsible corporate citizen sensitive to the communities and environment in which it works. We realize the responsibilities which we owe to the people of the country and to the Government. METL is the largest taxpayer in Tanzania. The company is actively involved in various social projects, including sport promotion. Our notable contribution is the sponsorship of Tanzania’s most popular football teams Simba and Singida United. In fact, METL is committed to contribute 300,000 US dollars over the next three years towards the sponsorships of these two clubs.

The company is committed to live up to the expectations of the Government by investing in various business enterprises thus increasing government revenue and creating more jobs for Tanzanians.

Q: What plans do you have for the future?

A: We have lots of plans in the pipeline. METL is not only in the process of consolidating the gains it has made in its core competencies but has been making forays into new areas. But insofar as future plans go, METL will continue to identify and explore new investment potentials and challenges and convert them into opportunities and success stories.

Our entry into oil refining, soap manufacturing and textiles forms part of this desire to expand, diversify and succeed. While retaining our leadership position in trading, we are continuously looking for various opportunities in the manufacturing and service sectors in the country.

METL is in the process of acquiring sisal-spinning mills and more sisal estates to effectively compete with synthetic and jute products and to expand the product line to include sisal twine, carpet buffing cloth etc.

All this is done to add value to our products and make sure quality products are available to the Tanzania consumers at affordable prices.

Lastly, I would like to record our deep and sincere sense of gratitude for the contributions of a large, loyal and dedicated workforce at METL who have made it all possible and who continue to share in the vision and mission of the organisation.
 

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