Mandiwanza’s extended stay costs Dairibord

Once a brand to reckon with, Dairibord had long appeared to be running out of ideas even before the collapse of its ambitious plan to merge with Dendairy. Some have intimated that the company’s gradual decline maybe down to Dairibord’s failure or refusal to change its guard. 

In all fairness, it was under the stewardship of current CEO, Antony Mandiwanza that Dairibord would rise from being a loss making state owned company to one of the best performing companies on the Zimbabwe Stock Exchange. However, after being at the helm for the past 24 years, it is rather surprising that Mandiwanza’s still does not trust that some of his lieutenants at the company are capable of taking over just as he did in 1997.

As countless examples have shown, it is quite easy to destroy what may have taken years to built all in the name of protecting your legacy. This might be just be the case with Mandiwanza one of Zimbabwe’s longest serving CEOs. The world over, CEOs are changed in order to bring in fresh new ideas and different perspectives. This is done so that companies evolve and develop to be world beaters, but this seems like this does not apply to Dairibord.

To quote baroness Dido Harding on leadership, she says, “I’ve always been of the view that two-term presidency rule is a pretty good one and CEOs shouldn’t overstay their welcome”.

When Mandiwanza took over the reign, he had a vision, which surely transformed the company to become a competitive entity that no longer required state protection. However, Mandiwanza’s continued stay is now working against the interests of the listed company. The recent failed merger with Dendairy is a case in point.

As it turns out, Mandiwanza believed that swallowing or partnering with his closest rival would reduce competition, grow the business and all the while maintaining dominance in the market. The CEO had seen this strategy work in the past when Dairibord acquired a 100% stake in Lyons’ back in 2001. The threat to Dairibord had been eliminated and the company was able to maintain its product lines.

The same tactic would be used in 2002 when Dairibord acquired a 40% stake in Charhons. However, unlike Lyons which it still owns, Dairibord eventually sold its stake in Charhons to Cairns in 2012 after Mandiwanza and his team failed to infuse fresh ideas.  Apparently, Charhons had experienced a business decline in sales and product development for a good 10 years. Since acquiring the 40% stake from Dairibord, Cairns Foods has been able to finally resuscitate the company something which former failed. 

In 2015, Mandiwanza was back to his old habits when he attempted to acquire Cairns Foods but this time he failed. 

Another example which proves that Dairibord is in urgent need of new leaders has to be the current state of NFB Logistics, a subsidiary that was created in 2003. Although the creation of NFB Logistics was a great idea itself, Dairibord’s inability to properly run this outfit once again shows that even the witty Mandiwanza is no longer on top of his game. NFB has since wilted to being close to non-existent as it now only transports mostly Dairibord products.

Meanwhile, under Mandiwanza’s watch, Dairibord has seen the number of its depots that are non-functional increase. For example, depots in Kadoma, Marondera and Mutare were taken out when the company was facing a shortage of raw milk. At the time, Dairibord resolved to reduce the number of its processing plants from the eight that were in play in 2013 to the current four.

The recently aborted merger between Dendairy and Dairibord is another testament to the poor planning process by the latter. When Dendairy was busy importing dairy cattle to increase its herd in order to increase raw milk for processing, Mandiwanza and his team were reducing processing plants to match the reduced raw milk deliveries.

Dendairy has been on an impressive run on investment at its Kwekwe plant, which saw them install a state of the art and efficient ‘Tetra’ processing plant. Dendairy achieved this at a time when Dairibord was protecting its old infrastructure and investing in stand-alone infrastructure which is way less efficient.

In keeping with old habits, Dairibord, which now sees Dendairy as a threat to its dominant position, decided to pursue the merger route. Again, the idea was to ride on Dendairy’s innovativeness while stifling the competition. 

Having failed to merge with Dendairy, it is now back to the drawing board for Mandiwanza and Dairibord whose only response to growing competition is killing it. Perhaps it is now time for Dairibord to do things differently but this can only happen when the company has a new captain who has fresh new ideas.

Of course, this may not be something that appeals to Mandiwanza who seems to view Dairibord as his child and wants to be associated with it in every way possible. Things are also complicated by the fact that he owns 2.7% of Dairibord Holdings and according to ‘Billionaires Africa’, he is investments on the ZSE are well above the US$4 million mark.

However, at some point in life there is a need to make room for other fresh minds. Someone new will come up with some fresh ideas which can stimulate growth and development. The thing about building a company or a firm is, you cannot solve every problem at once. In other words you have to work on a few things at a time, with the goal of increasingly getting better.

So you might have solved a major problem once but the million dollar question will be ‘can you move on to the next’. However, if you’re successful, you end up beating the odds.

In July this year, for the first time in more than two decades, Jeff Bezos woke up without the title he had held since soon after Amazon’s founding. But, analysts say this was for the betterment of the company and himself. Usually someone makes an impact when he is new but as time goes one might not value that impact as he or she would have established himself.

In November 2012, hospitality group RTG appointed Tendai Madziwanyika as CEO. Since then the company has managed to bring some new exciting products which appealed to the ever-changing market. In other words, there was a fresh beginning at the company. This saw the company breaking dividend deadlock after 13 years. And in the end, new blood just may save company

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