KEY COMPETITIVENESS FACTORS
- Production related
- Malawi’s production prices at factory gate are lower than those of 90 per cent of the other African exporters
- Productivity related
- Malawi ecological conditions allows it to harvest cane once a year as opposed to other African (South Africa) that harvests once every two years
- Reduction in the cost of transportation to African markets and to sea ports represent an opportunity to enhance Malawi’s price competitiveness and to bridge the current gap between its favourable production costs and its less favourable end-market prices.
- Markets related
- Quality
- Proximity to regional markets and strong relations with the EU market
- Both agricultural and factory operations retained accreditation under the ISO quality management system, with the implementation of the Hazards Analysis and Critical Control Points (HACCP) programme at both factories maintained. The Nchalo factory retained its Foundation for Food Safety Certification (FFSC) accreditation, under the FSSC 22000 standard. Dwangwa was certified under the Supplier Guiding Principles to provide Coca-Cola with specification sugar
- Business environment
- Documentation requirements and red tape
- Customs bill of entry (Form 12) - MRA
- CD 1 Form – controlled by Reserve Bank of Malawi
- Commercial invoice – By exporter
- SADC Certificate of Origin - MCCCI
- Consignment note /airway bill – Transporter
- Phyto-sanitary Certificate – Ministry of Agriculture
- Export quality certificate – Malawi Bureau of standards
- CHALLENGES
- Quotas for sugar imports into the EU and guaranteed prices for ACP nations and LDCs are being phased out meaning small producers in these countries are up against massive producing nations such as Brazil and India
- Transportation costs are likely to remain a weakness for Malawi in the short to medium term, while preventing access to certain markets such as South Africa in the medium to long term because of the latter’s sea access to Brazil.
- Product Modification. When exporting, companies may need to modify their products to meet foreign country safety and security codes, and other import restrictions
- Lack of milling capacity is a weakness. In Malawi, transport costs are such that sugar cane cultivation is only feasible within 55 kilometres of a mill
- SOLUTIONS
- Increase plantation area to compensate for price reduction
- Improve the transport infrastructure to reduce transportation cost
- Increase number of mills to allow for more processing
National Export Strategy has been developed focusing on upgrading the sector and increasing exports.
account for roughly twenty per cent of imports in the medium to long-term;