BELARUSIAN companies have become major suppliers of tractors, buses, trucks and fire-fighting equipment to Zimbabwe largely because of having the right vehicles and a willingness to enter into financial arrangements that allow buyers to pay over three years with low interest rates.
The strong political ties between the two countries helped build up the business, largely by oiling the processes, providing guarantees, opening doors and setting up programmes that tied in local authorities and farmers. The decisions over import duties and other taxes were also critical, many of the products have been able to enter Zimbabwe under duty concessions so cutting prices.
But important as these were in opening the market, the market has been largely created by business decisions of selling the right products at the right price with back-up and finance.
So the upgrade of the supply and marketing by setting up an assembly plant in Zimbabwe as is now planned by the end of the year makes a lot of sense and allows the Belarus businesses to also look at regional markets, especially if they can start adding some local content to meet rules of origin.
But for a start, even just final assembly should cut back sharply on transport costs, and these cannot be negligible when moving heavy vehicles from a landlocked country in the middle of Eastern Europe to a landlocked country in the middle of Southern Africa. Moving the parts as kits would seem to make best use of a supply line that must go from land, sea and back to land transport.
While Belarus vehicles seem to be very price competitive, making them even more so by cutting transport costs and doing final assembly in Zimbabwe will consolidate the market and allow the equipment to remain competitive even when others start seeing the sense of offering the same sort of finance arrangements in Zimbabwe.
It would also move the duty concessions from what amount to one-offs for each particular programme to the regular concessions offered permanently for vehicle assembly, allowing for a far greater degree of long-term business relations and business planning on both sides.
That again will help concentrate the business parts of the relationship and help minimise the need for special action.
This double combination is what built up the previous assembly plants in colonial Zimbabwe. These days there is a better trained workforce available, from skilled workers all the way up to engineering professionals, so labour is no problem.
The Belarus suppliers can also then be looking at the rules of origin for the African Continental Free Trade Area, which at least in the early stages will require only modest local content input for the assembly plants, and with Zimbabwe's industrial base now being extended rapidly with new steel mills and the like, quite possible to meet fairly soon.
This could also allow design modifications when these were thought desirable for Zimbabwean and African conditions, although Belarus engineers have had to design and produce products for some really harsh environments with infrastructure very variable.
Local assembly also allows for far easier training of the sort of service back up needed. Every vehicle and every machine needs regular servicing by someone who knows what they're doing. Both servicing and repairs need stocks of spare parts and service mechanics who are familiar with the machines. Centring this supply and skills training on an assembly plant makes all the back-up a lot easier.
Good original product and adaptive design, plus being inside a free trade area, will help build up regional markets, with word of mouth advertising from Zimbabwean users being probably the most effective way of breaking into non-traditional markets among our neighbours long dominated by others.
What we are arguing is that the assembly plant should make business sense, for everyone, so that the decision to go ahead is a business decision and will build up longer-term relationships. When establishing new trade relationships, the diplomats and political leaders can provide a lot of help, but for the trade to endure it must make business sense.
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We think that this plant does meet these conditions, so as the plans are turned into factory, the Zimbabwean authorities at national level, and in whatever city or town gets the plant, should be willing to smooth the way.
Zimbabwean farmers, local authorities and businesses have been using the Belarus vehicles and equipment that have come through the doors opened through diplomacy, and seem to be happy with the value they are paying for. So the continued progress towards expanding business and trade ties seems appropriate.
This will be seen among suppliers of other equipment into Zimbabwe, the country having several advantages when it comes to selecting a regional and AfCFTA hub, and so having ever more model investment and satisfied investors in Zimbabwe's industrial development is important.
Modern global trade would seem to need ever more spread of manufacturing by suppliers, both to enter markets and to find ever more skilled workers, as well as control costs by making best use of transport and local resources.
