SME & COMPETITIVENESS
Industrial Clusters; Developing Regional Value Chains for
Competitiveness; Sourcing markets for SMEs
Presented by:
Chance Kabaghe
Chairman – Seedco Zambia & Zambia Assoc. of Manufacturers
Presented at the 8th Comesa Business Forum – Kampala Uganda
Organisation of Presentation
 Introduction
 Factors of Competitiveness
 Industrial Clusters
 Opportunities for MSMEs – Seedco Model
 Challenges of working with MSMEs
 Recommendations
Introduction on ZAM & Seedco
 ZAM is a Business Association which is a voice of Industry particularly the
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Manufacturing Sector
We represent up to 19 subsectors in the manufacturing sector including
agro processing. Membership of 240 with 180 active members
Seed Co develops and markets certified crop seeds, mainly hybrid maize
seed, but also cotton seed, wheat, soya bean, barley, sorghum and ground
nut seed.
Most of our hybrid and non-hybrid cereals and oil crop seed varieties are
proprietary, having been developed and bred at our research stations
through market-oriented research and breeding program.
Seed Co Limited, a public listed company incorporated in Zimbabwe and
quoted on the Zimbabwe Stock Exchange, is the leading producer and
marketer of certified crop seeds in Southern Africa.
Factors of Competitiveness
Definition of Competitiveness in terms of outcome rather
than factors that determine competitiveness
“the ability to produce goods and services which meet the test of
international markets, while at the same time maintaining high
and sustainable levels of income or, more generally, the ability of
(regions) to generate, while being exposed to external
competition, relatively high income and employment levels”
Factors of Competitiveness:
 Basic infrastructure and accessibility
 Human capital
 Other factors such as R&D, Innovation, demography etc
Industrial Clusters
 Focus for the Government of Zambia as an instrument for
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industrialization as well as a tool to realize economies of scale.
Clusters are not a new phenomena, they have worked very well in
countries such as Ethiopia, Cambodia, Germany just to mention a
few.
There must be a two pronged approach; National and Regional level
Attention must be paid to market and business linkages if these
clusters are to survive
COMESA roll out of Industrial clusters must have strong linkages at
regional level for purposes of supplying big markets such as US
through AGOA, Europe, Asia etc
Need for specialization in the region depending on comparative and
competitive advantage
Opportunities for MSMEs – Seedco as a Model
 Outgrower schemes for farmers
 Distribution of seed within and outside Zambia
 Services
 Supply of products e.g. Protective Equipment,
Opportunities for SMEs – ZAM Model
In view of this the aim of the incubators to be established by ZAM in
partnership with other stakeholders will be to reduce the overall cost
of doing business by:
 Enhancing economies of scale (group procurement & supply)
 Provision of communal facilities thereby reducing the cost of acquiring
equipment
 Increased bargaining power
 Guaranteed market linkages
 Infrastructure availability ( fully equipped cooperation and office
facilities)
 Helping in combining business plan and strategy (Training)
 Access to finances
Cont…
 Providing personal business mentors and coaches
 Partner and cooperation networks
 Contact network with other startup entrepreneurs
Challenges of working with MSMEs
Major constraints faced by MSMEs include limited access to affordable
capital (Investment and Working Capital), High input cost, low
productivity, high transport costs, registration procedures and cost
and business management skills among others.
These constraints result in:
 Inconsistent supply
 Quality
 Capacity to supply required demands
 Cost/ Price
Recommendations
 To ensure standards in the MSME sector there must be emphasis on
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incubation facilities ( for start up especially)
Clusters should be left for already established entrepreneurs and not
start-ups
Factors of competitiveness must be addressed if our SMEs are to
compete both at national or regional level
MSMEs must realize they are in business and therefore handout
mentality/ attitudes must not be the center of discussion even at
policy level
There is need for Private sector participation if these clusters are to
succeed, Governments must limit themselves to facilitation and not
implementation
Cont.
 To ensure these clusters are Private sector driven the COMESA
model must focus on working with either Country focal points or
other Private sector organizations depending on sector,
government must be engaged at policy level.
Contact Details
 We have a fairly fully fledged Secretariat in Lusaka
Zambia Association of Manufacturers
Postnet Box 424, Manda Hill Centre
Showgrounds Stand No. 2374 Mopane Parade
Tel: 253696 Fax: 253693 email: zam@zamnet.zm
website: www.zam.co.zm