Saturday, November 26, 2022

BDC subsidiary explores SADC market

The global recession that has made governments around the world cut on spending, including Botswana’s development budget, has made local companies innovative.

Lobatse Clay Works (LCW), a 100 percent Botswana Development Corporation (BDC) owned company said plans are at an advanced stage to export its products to the SADC market.

“The economic slump has definitely affected us,” revealed Thelma Maswikiti, the company’s Sales & Marketing Manager.

“But, luckily for us, we only started feeling it last year. We have been looking at the entire market.”

LCW controls 42 percent of the market, while 31 percent is for imports and the shortfall filled by local competitors.

The move will see the company and its shareholder spending substantial amounts of money to ready the plant to take more work.

Currently, the factory built at P5 million in 1992 has the capacity to produce 36 million, but is running under-capacity because it will only produce 30 million clay bricks annually.

The plan is to upgrade the capacity to 40 million and then double that in preparation for the export market.

The management said it will also mean an increase in the current workforce of 200 people by another 40 percent.

It is believed that the expansion product will cost P100 million and it will be financed by BDC and a suit of financial solutions from financial institutions.

“The money is there. We are just waiting for implementation,” Buzwani Manyepedza, LCS General Manager, told Sunday Standard.

The move to tap into the regional markets is also influenced by the demand in the economies of Democratic Republic of Congo (DRC), Angola and Mozambique that are rebuilding from period of wars.

Already, LCW exports to the Namibian market at a small scale, but could have resistance from the South African market, which puts Black Economic Empowerment (BEE) first at the detriment of regional integration and Protocol on Trade now the SADC Free Trade Area.

Other markets in the region could also be problematic for LCW because they charge import duties.

In a country where cement brick products dominate the market, LCW has had a competitive edge although there are other competitors.

“In terms of price, there is competition because people have chosen cheaper bricks,” said Manyepedza.

“We are in competition with regional suppliers like the ones in South Africa in terms of quality.”

The Lobatse based LCW manufactures burnt clay products with clay from its two flagship mines in Mmamabula and Woodhall.

The company is now on trial for the Barolong Brown, which will be much cheaper at around P1.00/ brick.

The current plant produces 80, 000 bricks a day under its 24 hour operation.

LCW face bricks are manufactured to the specifications of the Botswana Bureau of Standards (BOBS 20) and the South African Bureau of Standards (SABS 227).

LCW face bricks are of a compressive strength, averaging 25 MPA (17-35 MPA) and during the manufacturing process, LCW face bricks undergo a series of stringent quality tests which ensure that the final product is to specification.

LCW total assets are now valued at P120 million.

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