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August 31, 2007

Zimbabwe signs tractor assembly deal with Iranian, Chinese partners

Zimbabwe's Industrial Development Corporation (IDC) has entered into a tractor manufacturing agreement with the Iran Tractor Manufacturing Company and Dongfeng Agricultural Agricultural Machinery Company of China. IDC says the government to government deal would earn it over US$30 million annually from the export of at least 2,000 tractors.

IDC spokesperson Mr. Derek Sibanda said the tractor project would see Zimbabwe manufacturing up to 7,000 tractors a year. To start with, a total of 4 000 tractors would be manufactured a year. The Zimbabwe foundry will produce 1,800 tractor kits and a further 2,200 will be imported in kit form for local assembly at the Willowvale Mazda Motor Industries (WMMI) assembly plant.

At least 60 percent of the annual production figures would be earmarked for export, he said, with an initial export target of 2,000 tractor units. IDC would also produce spares and implements and related equipment for the export market.

"There is going to be a creation of a long-term competitive strategic advantage for IDC and Zimbabwe through technology and skills transfer," said Sibanda, adding value addition on use of local raw materials and savings through lower import costs and export revenues would also accrue.

IDC has the capacity to assemble 29 tractors per day or 7,000 tractors yearly with no additional investment in normal working time. "We have already demonstrated our capability before when we assembled about 420 tractors for the Agricultural and Rural Development Authority," he said.

"To date, we have identified and made contact with 18 Zimbabwean companies such as Hastt (Private) Limited and Bain whose operations tend to benefit from this project," said Mr Sibanda.

There has been an overwhelming demand for tractors in Zimbabwe in view of the agrarian reform programme that began in 2000. This project will therefore ease the demand and boost the country’s agricultural production.

Under the deal, the two foreign companies would also manage the distribution and maintenance of the tractors once they are sold, while in time they would also be expected to invest in foundry and forging plant to manufacture kits and tractors for both local and regional markets.

IDC would follow up and maintain Massey Ferguson and Dongfeng tractors across Southern Africa.

Zimbabwe has a targeted commercial crop hectarage of 4,3 million hectares. About 10,000 tractors are currently available to work this land. Conservative estimates of additional tractor requirements are 50,000 tractors now and 120,000 tractors in the next 10 years.

The Herald

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