ZIMBABWE’S tobacco industry is set to grow by more than 100% within the next five years under a fresh plan to be laid out by new Tobacco Industry and Marketing Board (TIMB) chief executive officer Meanwell Gudu, Standardbusiness can report.

Gudu’s multi-pronged strategy to consolidate gains made by the industry in the past decade will include a push towards encouraging farmers to stop decimating swaths of the country’s forests for curing tobacco, while scaling up investments into value addition and increase foreign currency inflows from tobacco exports.

“As the incoming CEO, my key objectives are to lead in transforming the tobacco value chain to a US$5-billion-dollar industry by December 2025 in line with the tobacco value chain transformation strategy,” Gudu said, speaking exclusively to Standardbusiness on Friday.

The US$5 billion would be more than double the industry’s current value of about US$2 billion, while another plan to increase output to US$300 million kg will be a huge leap from about 184 million kg attained during last year’s marketing season.

This year, the tobacco farming sector is expected to increase output to 200 million kg.

“(I plan) to work with stakeholders in the industry including other government departments to increase annual production to 300 million kilogrammes by 2025, to increase the local financing of tobacco production to 70% of total costs per hectare, through localisation initiatives, from the current 30% by 2025, to accelerate value addition and beneficiation from the current 1% to 30% by 2025 and to champion sustainable tobacco production by ensuring that 100% of tobacco produced is being cured using renewable energy by 2025,”said the TIMB CEO.

Gudu is one of only a few Zimbabwean CEOs, who have been bold enough to make their vision known from the outset, a huge departure from a culture of secrecy that has dominated executives for decades.

Perhaps Gudu has benefited immensely from his stint at the United States-based Stanford University, where he obtained executive education before returning to take up various key roles in Zimbabwe’s tobacco sector.

His frank responses spoke of an executive, who is clear about the direction that he wants to take Zimbabwe’s tobacco farming sector, and how he hopes to help thousands of new entrants to the industry create wealth from swaths of farmlands that they have taken over under a domestication plan being pursued by the government.

This could be the reason why the TIMB board chose to tap from within the authority’s ranks for the successor to long-serving CEO Andrew Matibiri, who left last month after leading the tobacco regulator for 15 years.

Gudu had worked within the TIMB as a technical services director since October 2008.

“(I want to) lead the industry in attaining Vision 2030, guided by the National Development Strategy (2020 to 2025) and the Agriculture and Food Systems Transformation Strategy (2020 to 2025) and to improve the credibility of the tobacco marketing system by ensuring 100% compliance to regulations by all players,” he told Standardbusiness.

But if achieved within the next five years, Gudu’s push towards value addition will be a grand step towards transforming tobacco farming, which has struggled for a decade to reach its full potential.

The Harare-based African Institute for Agrarian Studies said in one of its studies that firms importing raw Zimbabwean tobacco ended up earning 14 times more revenue than the value at which they buy the leaf when they sell processed products.

Gudu said his strategy would be guided by a broad plan to transform Zimbabwe into an upper middle income economy by 2030.

On May 1, 2021 the government appointed Meanwell Gudu (MG) as new chief executive officer at the Tobacco Industry and Marketing Board ( TIMB), replacing Andrew Matibiri, who retired last month.

Gudu has a lot on his plate to transform the country’s tobacco industry.

On Friday, the new TIMB boss spoke to our business reporter Fidelity Mhlanga (FM) about his vision for the tobacco regulator.

Below are excerpts from the interview…

FM: Congratulations on your new appointment. Tell us about your journey in the tobacco industry.

MG: Meanwell Gudu is a renowned tobacco industry executive, who has served various organisations at senior leadership level.

He joined TIMB in October 2008 as a technical services executive.

Prior to joining TIMB, I served as head of field services division at the Tobacco Research Board ( TRB).

I also previously served as director for tobacco development at the Agricultural and Rural Development Authority (ARDA).

I attended the advanced executive development programme at Stanford University Graduate School of Business.

I am holder of an MBA, Post Graduate Diploma in Management for Executives and BSc. Agriculture degree, among other qualifications.

FM: As an executive you are aware of inherent problems in the industry, and how do you seek to rectify these?

MG: Sustainability issues are becoming more prominent in the tobacco industry.

The major challenge the sector is having to deal with is deforestation caused by growers cutting down indigenous trees for fire wood for curing tobacco.

There is need to plant more fast-growing tree species to supply firewood for curing tobacco to ensure that 100% of the crop is cured from renewable sources of energy by 2025.

There is also need for more research and development of curing systems that can burn coal more efficiently and at the same time reducing the carbon foot-print of coal on the environment e.g., use of catalytic convertors to reduce carbon emissions from burning coal.

The other challenge facing the industry is the reduction of viability of tobacco growers because of high-cost structure of producing tobacco.

The retooling rates are generally not pegged on foreign currency auction rates leading to high cost of production.

FM: What is your vision for the tobacco industry?

MG: As the incoming CEO my key objectives are;

• To lead the industry in attaining Vision 2030, guided by the National Development Strategy (20202025) and the Agriculture and Food Systems Transformation Strategy (2020-2025).

• To lead in transforming the tobacco value chain to a US$5 billion-dollar industry by December 2025 in line with the tobacco value chain transformation strategy;

• To work with stakeholders in the industry including other government departments to increase annual production to 300 million kilogrammes by 2025;

• To increase the local financing of tobacco production to 70% of total costs per hectare, through localization initiatives, from the current 30% by 2025;

• To accelerate value addition and beneficiation from the current 1% to 30% by 2025.

• To champion sustainable tobacco production by ensuring that 100% of tobacco produced is being cured using the renewable energy by 2025.

• To improve the credibility of the tobacco marketing system by ensuring 100% compliance to regulations by all players.

FM: Tell us your views about this season compared to last year. The prices, number of farmers who registered to grow, hectarage under tobacco and projected output

MG: The 2021 marketing season has started off very well and we are hopeful we will surpass last year’s 184 million kgs of tobacco by the end of the selling season.

2021 2020 Registered growers 150 473 148 153 Hectarage 125 000 ha 117 000ha Average price so far USD$/kg 2.60 2.25

FM: Now that government has set a target of 300 million kgs of tobacco. How do you intend to achieve this target?

MG: By the year 2025, the TIMB, working with stakeholders in the industry including other government departments seeks to increase annual production to 300 million kgs.

To achieve this, we envision a collective sustainable production of tobacco as the future for tobacco in Zimbabwe.

This will entail efficient production of quality tobacco in conditions that limit the impact on the natural environment and that will improve the socio-economic conditions of the people and communities involved in its production in line with the Sustainable Tobacco Production (STP) standard produced by the global cigarette manufacturing companies.

FM) Contract floors have been gaining ground against tobacco auction floors. In fact, tobacco auction floors are on the verge of extinction. How do you intend to deal with this problem?

MG: Certainly, there are plans to keep the auction system running.

The only way that can be achieved is to ensure farmers have access to more funds at their disposal.

The government recently launched the Agriculture Finance Corporation (AFC) in support of the National Development Strategy 1 document.

The Land Bank is mandated with undertaking expanded banking and financial services provision to all categories of farmers in Zimbabwe (A2, commercial, A1, resettled and communal farmers), thus underpinning agriculture recovery and productivity.

As TIMB we are also rolling out the Tobacco Input Credit Scheme ( TICS) to support farmers with inputs, working capital and technical expertise.

FM: Middlemen have been a menace during the tobacco season and you recently published names of bogus tobacco buyers. Tell us more about this. Are you winning this battle against middlemen?

GM: Side marketing is a crime, which under Section 36 (1) and Section 44 (1) of the Tobacco Industry and Marketing Act Chapter 18:20 attracts a level five fine or six months imprisonment or both.

A contractor, who also violates Section 5 (1) of the Statutory Instrument 61 of 2004 if convicted will be liable to such fine or to imprisonment for such period as the court deems fit or to both such fine and such imprisonment.

The list of names, which we have published are of those who have been convicted and fined.

With this exercise, we are encouraging members of the public to shun side marketing at all costs to avoid fueling an illegal activity, which has the potential to kill the tobacco industry.

FM: Some contracting firms have been failing to pay farmers on time. Some farmers are still owed money for last season’s tobacco deliveries. What is your comment on this?

GM: During the onset of the 2021 marketing season, some contracting companies were facing some system challenges and this led to delayed payments.

However, the affected companies promised to address that issue and ensure timeous payment to the tobacco growers.

FM: Contract firms this season are said to be offering lower prices such that at the end of the day they do not remit money to growers after deducting funds for inputs. What are your views on this issue?

MG: The TIMB’s role is to regulate and promote the orderly marketing of tobacco to the satisfaction of all stakeholders involved.

With the pricing of tobacco being determined at the auction floors through a transparent system, the grower is protected from any unfair pricing by the contractor, who stands guided by the previous day grade price matrix obtained from the auction floors.