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Andile Tshuma
WHILE many manufacturing firms struggle to remain afloat due to a myriad of challenges mainly shortage of foreign exchange to procure raw materials, some have devised innovative ways to overcome challenges and remain operational.

One such firm is Meprin Founders and Engineers, which was established in April 2 000 in Bulawayo. Meprin, is a foundry firm that mainly deals with the manufacturing of mining equipment, raw water and sewer water equipment and manhole covers. The company also makes clean water equipment such as saddles, bush pumps, short collar joints as well as domestic products that include three legged pots and baking pots. These are all made from scrap metal and remoulded cast iron.

Business Chronicle reporter Andile Tshuma (AT) met with Meprin Founders and Engineers Company director, Mr Price Gobvu (PG), who shared how his company has effected innovative strategies to deal with the prevailing economic crisis. The following is an excerpt of that interview.

AT: Mr Gobvu, in light of the harsh economic climate, how have you managed to keep Meprin Founders and Engineers afloat?

PG: Well, it is really a tough playing field, definitely not for the faint hearted. We have been compelled to take some drastic measures in the last quarter.

We recently had to lay off 10 of our staff due to cash challenges. The company employed 35 people but at the moment, we have to make do with a 25-member team.

AT: What challenges have compelled you to do that?

PG: Due to the liquidity crisis, we have experienced a lower uptake of our domestic products locally. Cash is quite scarce now and we have to buy everything using plastic money, and due to the nature of our business, sometimes it is not conducive.

The cash shortages have brought about a three-tier system of pegging prices; you will find that a supplier will charge differently for cash in United States Dollars, bond notes and Real Time Gross Settlement (RTGS) or Zipit bank transfers. This is quite problematic and is unfair business practice as some people in business are still reluctant to embrace the use of plastic money.

We encounter our biggest challenge when we have to buy scrap metal, which we melt to produce different products. It’s a major challenge as most of our major suppliers still prefer cash.

These operational challenges are making us lose out on revenue as we now only focus on the more profitable lines of our foundry business, which are mainly our mining equipment production. We now do domestic products such as three legged pots only as per order as they do not sell fast.

AT: How, then, do you manage to keep afloat despite the challenges that you have so far highlighted?

PG: One major move we took was getting rid of the middle man. The middle men used to  negotiate deals between us and suppliers. We have been contracting a number of companies to take care of various aspects of the business needs, such as waste disposal. We generate a lot of waste such as coal, so we had someone who would bring people with trucks to do that for us. He would also find people who would transport our scrap metal.

However, we now do it all by ourselves as it is cheaper, although more hectic. We now deal directly with our suppliers and also our clients wherever possible. We have come to the realisation that middle men who link us with clients are the ones who usually come up with funny terms and conditions, and are often an expense. They are indeed convenient but such times call for tightening on expenditure.

AT: So what have been the benefits of this strategy and what challenges, if any, have you faced in implementing it, and how are you dealing with them?
PG: The major challenge is that we are not experts in negotiating deals, but we have set up our own marketing within our structures. This is a family company so my sister now does the marketing and we are getting there although it is taking time, a precious resource.

AT: What other measures have you put in place in terms of innovations to deal with the current economic situation, the unavailability of physical cash in the country?

PG: We are now maximising on exports. We have established markets and relations in Zambia, Lesotho and Malawi. We are currently looking into tapping into the Namibian and Democratic Republic of Congo markets. There is a lot of mining activity in the Western Region of Congo and we are in dialogue and doing market research.

We have also innovated by focusing more on our mining equipment production because it sells faster and is currently more profitable as the mining sector is quite vibrant in the country and the region as a whole. We have developed hammer mills that are very strong, durable and have no vibration for rock crashing. It is unfortunate that we have to deal with cheap imports from China.

However, our clients now know that our products are reliable and durable.We have during the past 17 years worked hard to improve our brand.

AT: What type of mining equipment would the company be exporting if these negotiations are successful?

PG: We will expand on our hammer mills, which have proved to be very much on demand in the region. We will also introduce other products such as spares for gold washer plants, which are also much needed in mining, as the current ones mostly from China wear off quickly.

AT: So how have the new innovations enabled you to beat the cash shortages and other challenges that you have mentioned?

PG: Well, producing quality and being consistent has given us the ability to withstand competition from cheap imports. The new innovations have become handy also as getting rid of the middle man has saved us money while maximising on exports has earned a substantial amount of foreign currency, which makes us contribute to the country’s gross domestic product.

AT: In conclusion, what is your secret to success and what would you recommend to other business people who are not coping with the prevailing challenges?

PG: The secret lies in producing products that are in demand. For example, many people are in foundry and engineering, but there are some things that only our company can provide, such that other firms will direct clients to seek particular services from us. Business has revolved and not evolved, it needs risk takers who will walk out of their comfort zones to explore markets. People in business should just follow their passions.

AT: So where do you see MFE in five years?

PG: If all goes according to plan, the firm will expand to be the biggest foundry business in the country, if not in the region, hoping that the economy will stabilise to encourage investment.

We are operating way below capacity because the space we have is inadequate for our work. As we speak we have three brand new furnaces that are gathering dust because we cannot mount and commission them due to limited space.

We have approached council seeking land for expansion and we are still waiting for response. We have a lot to offer Bulawayo but lack of space for growth is hindering us.

-Andile Tshuma is a fourth year journalism student at the National University of Science and Technology.