Assessment of Market Potential for Value Added Sisal Products in Tanzania

Washa, Fares L.L (2008) Assessment of Market Potential for Value Added Sisal Products in Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

Sisal is one of the commodities which are facing stiff market competition from synthetic materials. It had a strong base in the 1970s to 1980s, but the demand for sisal had not escaped the general trend of substitution of natural fibre by synthetic fibre. Tanzania was once the world's largest producer of sisal in the 1960s and 1970s contributing to 24% in the sisal global market at 230,000 tones to the present fourth position with a global market share of only 7%. Yet there is a wide range of traditional and non-traditional sisal products which can be exploited commercially to increase the Tanzania's global market share. There is a need therefore to identify who are the buyers, why do they buy the sisal products they buy so that the sisal industry can flexibly respond to the changing market requirements in order to increase its market share and thus increasing its ability to fill the existing gap between what is presently being sold commercially from 33,000 tons in 2007 to 100,000 tons by the year 2010 I. It is important to determine as to what extent value addition to sisal fibre and pulp production can contribute to sisal market share to the Tanzania sisal industry. Empirical and theoretical literature review was done thoroughly and assisted in charting the direction of this study. This study employed both qualitative and quantitative approach, because of its intrinsic advantage in that it allowed an in-depth, longitudinal examination of the I Tanzania Sisal board Statistics 2007 instance being studied in that it provided a systematic way of looking at events, collecting data, analyzing information, and reporting the results. Purposive sampling was used with data collected from within the Tanzanian sisal industry. Data was analyzed according to the hypotheses set, in which case hypotheses could be accepted or rejected by the actual findings. As it turned out, both null hypotheses were rejected and therefore both alternative hypotheses were proved to be valid and therefore accepted. Research findings show that the market potential for reinforcement sisal pulp and raw fibre world wide by the year 2010 is estimated at 350,000 tonnes and 200,000 tonnes respectively, whereas Tanzania can reach a production potential of 100,000 tonnes by the year 2010. This research concludes that controlling the costs of production through policy instruments and proper planning for both sisal fibre and its value added products, have a role in stimulating or stifling sisal production in Tanzania. It is further concluded that increased production of sisal and value added products can be enhanced through sectoral financial support by the government to encourage investment in the sisal industry. It is recommended that as a matter of urgency, the sisal industry should find ways of reducing cost of production as well as concentrating in market segments in which sisal has comparative advantages.

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