Zambia Business News
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Lactalis Zambia to change business model. The company has decided to close its manufacturing site and to strengthen its commercial operations via a new business model effective 1st April 2025. The new commercial model involves importation of Lactalis products from South Africa and other subsidiaries in order to sustain consumer demand for its quality and nutritious products across its Zambian retail and wholesalers.
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Zambia Environmental Management Agency (ZEMA) reported approval of 1,325 projects valued at US$10billion for the year 2024, compared to 2023 which recorded 1,129 projects at US$7billion. The main projects were Mining projects at 678 representation 51% followed by Manufacturing with 217 projects (16%), Energy with 196 projects (15%), and Infrastructure with 163 projects (12%), Agriculture with 53 projects (4%) and Tourism with 18 projects (2%).
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The Association of Mine Suppliers & Contractors claims the closure of Kagem Mine has worried the local business community especially suppliers & contractors. In an effort to cut-back on expenses & development costs, Gemfields suspended its Kagem emerald mine operations in Zambia for the 6 months. The sales of its stones have fallen materially with $16.1million for emeralds, and $46.2million for rubies in its recent auction compared to previous years.
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KoBold Metals, the AI-driven mining startup sponsored by Bill Gates and Jeff Bezos, has acquired US$537million in its Series C funding round. This funding round gives the Berkeley-based company a valuation of US$2.96 billion and additional capital to foster ambitious goals in the critical minerals sector. This brings KoBold’s total fundraising to US$1 billion. The funds will expedite exploration, develop high-potential projects, and enhance its R&D capabilities.
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ZESCO Limited reported spending about US$90 million/monthly on the importation of about 500 megawatts of electricity. ZESCO has since raised US$2 million in excess since implementing the emergency tariff plan. This is according to the performance report submitted to Energy Regulation Board (ERB) on the implementation of seven directives given on the approval of emergency tariffs by Acting Managing Director Mr. Justine Loongo.
Zambia Economic News
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The International Monetary Fund (IMF) names Zambia among top 10 sub-Saharan African countries projected to have the highest Gross Domestic Product (GDP) growth rate for the year 2025. Zambia’s GDP growth rate is projected at 6.6%
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Dr. Situmbeko Musokotwane Minister of Finance and National Planning stated that tax expenditure is key to economic growth and revenue generation. He also highlighted long term benefits of giving tax expenditure that reduces current revenue collections in the interim, however subsequently stimulates economic growth and increased tax revenues. Increased investment flows empowers government’s ability to fund infrastructure development & public services.
- The Zambia Revenue Authority (ZRA) declared net collection of ZMW130.9billion, exceeding the Parliamentary target of ZMW125.3billion by a massive ZMW5.6billion. The performance highlights ZRAs strategic focus, operational efficiency, and resolve to promote transparent and effective tax administration system. ZRA paid out ZMW17.6billion in refunds demonstrates the Authorities commitment to fairness, accountability, promoting taxpayer confidence & compliance.
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The Energy Regulation Board (ERB) revised the pump price of petrol upward by ZMW1.00/litre from ZMW33.67/litre to ZMW34.67/litre. However, the prices of diesel, kerosene and jet A-1 remained constant because the resultant changes in the wholesale prices were below the trigger band threshold of 2.50%. Thus, the prices of diesel, kerosene and jet A-1 have been maintained at ZMW32.43/litre, ZMW28.67/litre and ZMW31.49/litre, respectively.
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The Zambia Development Agency (ZDA) reported a record US$9.83billion actualized investment, from a total of US$58.78billion committed investments. The actualized investments were realized from 497 projects, with a committed investment of US$18.74billion. The Mining sector received the most investment inflows at US$3.36billion, seconded by Manufacturing at US$1.19billion, Transport at US$792.34million and Agriculture at US$487million.
Global Business & Economic News
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Africa: Egyptian Prime Minister Mostafa Madbouly reported the country’s record high of 15.7 million tourists in 2024. The tourists count reduced massively from > 13 million in 2019 to about 3.7 million in 2020 resulting from COVID-19,recovering to around 8 million in 2021, 11.7 million in 2022, and 14.9 million in 2023 respectively. Tourism plus revenues from the Suez Canal, exports, and remittances from Egyptian expatriates are major sources of Forex income.
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Europe: Germany firm BioNTech entered into 2 separate settlement agreements with the U.S. National Institutes of Health and the University of Pennsylvania over payment of royalties related to its COVID-19 vaccine. The firm, partnered with U.S. drugmaker Pfizer, for its COVID-19 vaccine, claimed it would pay US$791.5million to the U.S. agency to resolve a default notice.
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Asia / Middle East: China’s Alibaba Group Holding Ltd , reported that it had agreed to sell its majority stake in hypermarket chain Sun Art Retail Group to Chinese private equity firm DCP Capital for HK$12.298 billion ($1.58 billion). Alibaba subsidiaries holds 78.7% according to the Hong Kong Stock Exchange. Alibaba paid-out US$3.6billion for a controlling stake in 2020 hoping to leverage its digital presence to support Sun Art’s hundreds of hypermarkets in China.
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South America: Brazil’s government has reached deals with two of the nation’s largest airlines, Gol and Azul to settle some outstanding tax obligations totaling Reais7.5billion ($1.22 billion). Gol will pay Reais880million for upto 120 installments to settle obligations of about Reais5billion. Azul will pay Reais36million immediately and an additional Reais1.1billion upto to 120 installments to settle more than Reais2.5billion in debt.
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USA: Microsoft is planning to invest about US$80billion in fiscal 2025 on developing data centers to train Artificial Intelligence (AI) models and deploy AI and cloud-based applications. Investment in AI has surged since OpenAI launched ChatGPT in 2022, as companies across sectors seek to integrate artificial intelligence into their products and services. Microsoft has been investing billions to enhance its AI infrastructure and broaden its data-center network.
Top Pick | Strategic Opinion
Zambia : The case of Lactalis Zambia
Competition is inevitable, therefore dynamic, adaptive, and sustainable business model accompanied with customer centricity is key to brand affinity, product top of mind and longevity.
Identifying key actors – The sector has seen a rise of aggressive competitors that include:
● Zambeef’s ‘‘ZamMilk’’ – Reliable localized distribution network of various meats.
● Trade Kings ‘‘Dairy Gold Milk’’– Renowned & trusted FMCG distribution network to remote areas.
● Varun Beverages ‘‘Cream Bell Longlife Milk’’ – Strong distribution network via Pepsi products.
● 260 Brands ‘‘Nutramilk’’ – Launched Zambia’s first Soy Milk made from non-GMO soybeans.
SWOT/PESTLE – Robust internal and external review of the organization’s capacity and environment sometimes helps with incremental rather than abrupt adjustments that shock the value-chain.
Value Proposition Alignment – The revised commercial strategy of importing from South Africa should be carefully reviewed to ensure no shelf stock-outs, sustained quality, competitive pricing (impact of import tax), cost effective & reliable distribution channels.
Sustainable Longevity – Its NOT too late to consider horizontal integration. This involves acquiring or merging with another firm selling complementary or substitute products e.g. acquisition of Masterpork & Zamanita by Zambeef.
Innovative Diversity – Relentless innovation and competitive benchmark is key to survival in the remaining markets, hence product diversification into lifestyle/health products such as baby milk, soy, almond etc which are on the rise is critical to remain competitive and avoid premature exits.
Employees & Third Parties – The divestment should be managed efficiently to ensure equitable/fair settlement for employee severance pay, suppliers & vendors.
Government Sector Support – The Zambia Association of Manufacturers (ZAM) should take keen interest in this development and collaborate with government to protect, grow & secure the sector with relevant job security.
Note: However we speculate, if the firm’s board of directors have approved this action, then that is what they deem fit for preservation of shareholder value.