Diversity is strength

Zambia's Malar Industries are becoming as vertically integrated as they can, with some interesting diversifications. Owned by Indian-born Subramonia Balakrishnan, Malar started up in 1993 as a factory making fully-moulded footwear. They now have 250 employees and have expanded into leather footwear, leathergoods, retail, a wet-blue tannery, a finishing tannery, farming, pet toys and, now, abattoirs. The pvc footwear factory, in Ndola - the major town in Zambia's copper belt - initially made 2,500 pairs/day of fully-moulded footwear in three shifts. It now has the capacity to make 7,500 pairs/day and averages 6,000. Fully moulded footwear is what most rural Zambians can afford and Balakrishnan said Malar had been able to bring down their prices, from the equivalent of about US$1/pair in 1993 to US$0.35 in 2002. The leather factory makes about 250 pairs/day, with a capacity of 500 pairs. It specialises in industrial footwear, with and without steel toecaps, mostly for the mines, but it also makes some civilian footwear - nurses' shoes and formal and casual men's and women's footwear. The group produce the two major components - upper leather and pvc units - and their in-house vehicle and machinery workshop also make the steel shanks and midsoles, making them less dependent on suppliers. Balakrishnan said the leather factory was 'very competitive' against imports and other locally-made footwear and also exported to Malawi, Tanzania, the Democratic Republic of Congo and Kenya. There are plans to export finished uppers to a Swedish company and to export industrial footwear to Holland. Malar are also eyeing the rest of southern Africa as trade restrictions between the various countries came down. Malar have expanded into leathergoods - notably industrial gloves, aprons, handbags, folders, purses and footballs - and 'this activity will be increased considerably when suitable leather is available on a regular basis', he said. In 2000, Malar bought a defunct, Chinese-owned wet-blue tannery in Kabwe and re-opened it to produce 70 hides/day. The group have invested about US$1million in plant, equipment and buildings and are now producing crust, split and finished leather. The tannery now processes 100 hides/day, of which about 70% is processed to wet-blue for export to Europe and the East. Most of the finished leather is for their own leather shoe factory but they also sell to crafters. The tannery stands on 10.5 hectares, with farmhouses and two boreholes and, just to ensure the company doesn't miss any opportunities, Malar farm maize, vegetables, sunflower, paprika and other crops. Balakrishnan said they planned to expand their agricultural activity by acquiring additional land in the neighbouring plots. Because of a shortage of Zambian hides - and with four other Zambian tanneries competing for them - Malar import from Malawi and sometimes Mozambique to supplement their supplies. To enable them to secure more Zambian hides, they have bought two municipal abattoirs, in Ndola and Kafue, and are 'in the process of acquiring more abattoirs to meet their full requirement of hides.'