Dorkin Dairies, Building a Successful Business in Zimbabwe

By Ben White on September 6, 2011

Today we had a chance to catch up with Ian King, the entrepreneurial mind behind Dorkin Dairies. A leading Dairy Production business he gives us a unique insight into the country’s changing business climate and the challenges and opportunities for his own business.

Where were you born and how long have you been in Zimbabwe?

Both my wife and I were born in Zimbabwe, we are third generation Zimbabweans. We have been Dairy farmers for most of our adult lives and a processor of Dairy products for the past seventeen years.

What is the business climate like today and how is it changing?

The business climate is currently extremely harsh as the country emerges from more than a decade of governmental fiscal mismanagement. The liquidity crisis (Zimbabwe currently trades generally in US Dollars) is dire. Hence our local Banking sector often has insufficient funds needed to lend to small businesses such as ours.

What are some of the major changes that have taken place for the better?

At the formation of a Unity Government in 2009, the use of the Zimbabwean Dollar was disbanded and a multi currency system was adopted. Almost immediately hyper inflation was brought under control. This single act has probably been the most significant event in bringing Zimbabwe back to some sense of normality.

What are some of the major challenges that still hinder more entrepreneurship in the country?

Thankfully, by African standards, Zimbabwe has a relatively sophisticated banking infrastructure, yet this sector was also unable to avoid the devastation of hyper inflation. In view of that, one of the major challenges facing any business today is the lack of funding from the Banking sector. However, this is changing as our Banks are beginning to recover and attract more funding from external sources.

An additional challenge facing business is the uncertainty of property tenure. In our case being farmers, we lost the title deeds (collateral) to our farm at the stroke of a pen, hence the difficulty we are having in securing local funding. In addition many businesses are facing the threat of the “so called” indigenisation act whereby companies of a certain size are supposed to give 51% ownership of their businesses to people deemed to be indigenous to Zimbabwe. This is an act of desperation on the part of an element of the unity government trying desperately to cling to power. Most of us realise that this is a passing phase and in due course this issue will be a thing of the past.

Tell us about why and how you started your own business?

As mentioned earlier my family are essentially Dairy farmers. In the 90’s the marketing of agricultural produce was still under the control of an Agricultural Marketing Authority which included raw milk. At the time our small dairy operation was unable to make money due to the pricing policy of the Authority, hence our decision to retail our milk ourselves. It was not long before we had sold all of our production and able to purchase milk from neighbouring farmers. This was how we got started into what is now branded as Dorking Dairies.

What are some of the major moments in the history (good/bad) of your business?

At our age there have been so many good & bad moments, however, in recent times probably the worst thing to happen was the demise of our Zimbabwean dollar. In 1980, we might add, our Dollar was on a par with the US$, then to watch our currency crash was terrible. By the end of 2008 we were illegally having to put our shop prices up twice a day and by nightfall, when we would try to buy (illegally) US$’s, there had been another devaluation. A lifetime of savings was totally wiped out in just a very short period, this was so difficult to comprehend and live with.

Conversely, the rebuilding of the business and seeing our country return to a modicum of normality is very exciting although extremely difficult. Real incomes of the population, however low, are improving. This is most evident in rural areas where the bulk of the population live and earn a living from small scale agriculture. For these folk there is no more free education or free health care for their families, everything has to be paid for in “real” money, hence their productivity has had to improve in order to generate “real” money. The growth of the informal market in Zimbabwe has been amazing to see.

Where are you today and what are the key efforts moving forward?

We have a wonderful range of products which have brand loyalty, admittedly in not all of the country, but we are able to sell our brand of fermented milk at a higher price than the main supplier. The populations is prepared to pay a little more for something they perceive to be a superior product. The major effort we are making at present is to move away from marketing our products through the formal market (supermarket chains) and building our market as direct suppliers to the customer through a vending system. This entails a fairly large investment in the form of vending carts, uniforms, licenses, etc., but the benefit is twofold a) creates employment and b) generates daily cash income. No credit is given whatsoever. The picture used for this interview shows our vending system.

What do you require now? How can VC4Africa members help you? What are you offering in return?

What we require now is a financial injection to the business needed to boost production. We are hampered in our development by the lack of funds. Currently our business lacks sufficient critical mass needed to generate adequate profits. In return we are offering a partnership, preferably in the form of equity.

See the venture profile.

How long have you been a member of VC4Africa, why did you join and what do you think is the best part about the project?

I joined VC4Africa about four months ago after I had been searching the internet for venture capital. I have no real opinions about the project at this stage, however, recently I have made contact with some serious investors which is most encouraging.

What is your message to the international business community looking at Zimbabwe?

I am not in a position to give the international business community any advice, however, I am sure there are many people out there who are sympathetic to the Zimbabwean cause and can see that our wonderful small country is returning to the “fold.” Maybe now is the time to think about investing.

Any final thoughts or questions? How can members contact you?

The best way to contact me is by email iak@africaonline.co.zw

Thank you for this interview Ian. We look forward to following your journey and to supporting you along the way. We hope Dorkin Dairies not only realizes its potential as a business but can serve as a powerful success story for the country.

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