WHILE the country was reeling in crisis around 2006 until 2008 when hyper-inflation screeched its peak, some enterprising individuals were observing and identifying gaps and saw the moment as richer ground to establish their start-ups. Going down the memory lane one can reminiscence how the year 2008 was the worst for the country’s economic outlook to the extent of government suspending the filing of official inflation statistics.
The period was characterised with highest annual inflation rate in the world, price controls, closing up of manufacturing firms due to huge losses, prize freezes, overvaluation of the Zimbabwean Dollar by the interbank rate, loss of investor confidence and domination of the black market for foreign currency and basic commodities. However, as bleak as the future seemed, it did not deter the determined entrepreneurs to set up companies that later turned out to be game changers in this current era.
While today we are faced with almost the same conditions, in addition to the global pandemic (Covid-19) that has affected business, resulting in the shutdown of some big companies and disrupted powerful economies, some entrepreneurs have managed to whither the storm and still finding their balance in the chaos.
A local entrepreneur who faced various challenges in starting up once said challenges are opportunities in disguise. Let us make a date with the past and reveal how two start-ups which were founded during the economic turbulence (2006-2009) managed to survive in such conditions and became house hold names.
THE BIRTH AND RISE OF MPALA CAR RENTALS SINCE 2007
Having started as an idea in Middleborough, UK in 2006 and officially incorporated on the 5th of April in 2007 in the midst of an Economic Crisis, the company was founded to serve the Tourism and Hospitality Sector with car rental services, ringing true to the adage that necessity is the mother of all inventions. The company started with three employees and just four vehicles which comprised of Mitsubishi Delica, Toyota Lucida, Nissan Sunny and Mitsubishi RVR.
In 2008, due to high costs of renting a vehicle and an unfriendly operating environment they resorted to selling tyres so as to stay in the game under the brand: Impala Tyres. On their Facebook page they once posted, “The year 2008 was quite a challenging year. Globally, economies were shaken and the environment wans favourable for business. In Zimbabwe the inflation rate was very high and this affected the buying power of the Zimbabwean dollar. The value of the Zimbabwean dollar fell sharply, which made it difficult to set fixed charges for our car rental services. This had a negative impact on the business, a start-up to make it worse. To survive we decided to sell tyres which were imported from South Africa. We did not abandon the car rental business, operations were still on, but not effective because the environment wasn’t so friendly. The tyre business was there to keep us in the game.”
Though founded in the midst of an economic crisis, it now offers a full range of services including self-drive, chauffeur drive as well as shuttle services. From the Harare Branch, it now has other branches in Bulawayo and Victoria Falls. It also now has footprints in Zambia, Botswana and South Africa having branches in Durban, Johannesburg and Cape Town, making it a regional recognized brand.
THE BIRTH AND THE RISE OF NASH PAINTS IN 2007
Founded in 2006 by Mr Tinashe Mutarisi and officially registered on 27th of March 2007, Nash Paints was formed as a company that will manufacture and distribute automotive, decorative, wood paints to a variety of customers and painting accessories.
Nash Paints started with only one branch at Chikwanha shopping centre in Chitungwiza with only three employees. Start-Up capital came from Mr Mutarisi’s personal savings and later on, he obtained financial support from financial institutions for expansion and growth in the later years.
Challenges faced and Survival Strategy
In the early years Nash Paints faced challenges in Brand acceptance. This was however overcame by producing quality products and marketing efforts. Procurement of raw materials also came as another challenge and establishing relationships with suppliers of raw materials came as a solution. Nash Paints also faced distribution challenges and this was curbed by establishing own retail outlets.
Growth and Expansion
Around 2017, Nash Paints reported that it had around 220 employees, 20 branches throughout Zimbabwe, a US$3 million worth plant that manufactures 50,000 litres of paint a day. Nash Pints has grown to be regional company with footprints in South Africa and 3 Zambia Branches. It also reported its plans to infiltrate in the Botswana Market.
Throughout its years of existence, Nash Paints has also mastered the art of acquisition and diversifying and now it partly or fully owns:
- Eastlea Paints
- Nash Furnishers
- Nash TV Zimbabwe
One thought on “The Rise of Start-Ups in Zimbabwe amid the 2006-2008 Economic Crunch”
Well written article