adminNgoni Dapira Business Correspondent
THE 2014 business environment in Manicaland, just like other provinces countrywide, was mostly characterised by company closures and a widening high employment gap.
Cases of company properties that were attached and auctioned due to debts owed to banks and other creditors ballooned each month as the liquidity constraints tightened in the country.
In his 2015 National Budget presentation, Finance and Economic Development Minister Patrick Chinamasa acknowledged that there was economic under-performance which reflected subdued economic activity, depressed and aggregate demand coupled with tax leakages, particularly at ports of entry.
However, the year had its positives with some companies commissioning state-of-the-art equipment to revamp operations.
There was also an increase in dialogue between Government and business to activate the economic blueprint Zimbabwe Agenda for Sustainable Socio-Economic Transformation, which was a positive, unlike in past years.
The Confederation of Zimbabwe Industries indicated that capacity utilisation of the manufacturing sector further went down from 36 percent to 33 percent.
Minister Chinamasa also said the company closure spiral effect indicating that in 2013, 878 companies closed shop rendering 14 499 jobless, whilst by mid-2014, 134 firms had closed-shop throwing 9 280 people on the streets, which only indicates the need for Government to revisit ways to increase local productivity and apply protectionism for local industry in specific sectors.
In June the Manicaland CZI chapter presented its 2014 report titled ‘‘Challenges facing Manicaland industry’’ conducted in collaboration with Africa University and the Ministry of Industry and Commerce.
The report indicated that so far since the introduction of multi-currency system in 2009 big companies in the province were collapsing or operating at very low capacity utilisation.
The report further indicated that industries in Manicaland were operating at a capacity utilisation which is ranging from 5 percent for the lowest to 52 percent for the highest performing company.
Here are some of the highlights of the Manicaland business environment in the year 2014:
Worst cases
The Capital Base saga which started in 2013 spilled into 2014.
The credit cooperative society, Capital Base saga drags one year later, and still no reimbursement is in sight for the over 2200 clients who invested in the scheme.
Over 2200 people were fleeced of their money by Capital Base in 2013 when the company filed for bankruptcy, owing over $4 million to investors.
The third meeting of the Capital Base saga under judicial manager, Mr Crispen Mwete of C. Mwete and Company was held in December with scores of people attending to check the approval of their claim applications by the Deputy Master of the High Court in Bulawayo.
Mr Mwete revealed that up-to-date they were still processing applications at the Deputy Master of the High Court in Bulawayo and verifying with applicants.
However, Mr Mwete bared that a business plan had been made and they would put it into operation as soon as they got working capital.
DTZ-Ozgeo Penhalonga mine closure
Operations at the mine were stopped in November 2013 following a Cabinet decision that stopped all river bank alluvial gold mining after the Mazowe River pollution incident caused by illegal gold miners.
The Environmental Management Agency closed operations at the Penhalonga mine under the instruction that the concern first concentrated on rehabilitation programmes before resuming operations.
In April 2014 a delegation from DTZ-Ozgeo appeared before the Parliamentary Portfolio Committee on Environment, Water, Tourism and Hospitality pleading with the committee to reverse EMA’s decision citing that it had negatively affected business.
DTZ-Ozgeo public relations and marketing manager, Ms Clara Ngwenya presented that the company currently employed 500 workers, of which more than 400 were redundant but still on their payroll after the closure.
She said the remaining workers were taking part in the rehabilitation of the land and further revealed that the company had so far mined 103 hectares of land in the Penhalonga area with 86,7 hectares rehabilitated.
The joint venture company said it had the capacity to produce up to 30 kilogrammes of gold every month and had plans to increase production outputs in the next two-years.
La Rochelle and Bhadhela Wholesalers shut down one of Mutare’s leading and oldest wholesalers — Bhadella Wholesalers —which had been operating in the eastern border city for more than eight decades closed shop in May. Close to 130 workers — 69 of them permanent employees and the rest on contract were left jobless.
In the hospitality industry another tragic closure was of the exquisite Penhalonga based hotel, La Rochelle that shutdown in January 2014.
Quest Motors lose out on big tender
The State Procurement Board in November granted a Zimbabwe Electricity Transmission and Distribution Company tender of 139 one-tonne pickup trucks to two local car dealing firms, against the Buy Zimbabwe directive under Zim-Asset to promote and protect local vehicle assemblers.
The SPB implements Government policy on the procurement of general use or operational vehicles for the public sector.
According to a notification letter to Quest Motors from the SPB, tender, number ZETDC HO/05 /2014, which amounts to a total of $3 495 147,10 was awarded to Croco Motors and Paza Buster (Pvt) Ltd.
This as a result meant that the 139 pickup trucks were imported, instead of being assembled locally by either Quest Motors or any other local assembler like Willowvale Mazda Motors Industries.
This was regardless of the fact that in July the SPB chairman, Mr Charles Kuwadza announced that the SPB under the regulation of the ZimAsset, Cabinet Circular number 16 of 2011, impelled all government entities to buy locally.
Positive cases
Beverage’s firm, Mutare Bottling Company in February commissioned a new $17 million automated bottling plant to boost productivity by as much as 400 percent.
This became its first major investment since dollarisation in 2009.
In October the firm also unveiled new state-of-the-art vending equipment valued at $111 000, which were expected to benefit 160 new Coca Cola vendors in Manicaland.
The chairman of the Mutare Bottling Company Vendors Association, Mr Thomas Mureyani said on average a Coca-cola vendor made $7 profit a day getting $2,40 profit per crate, which was sustainable.
MBC which holds the Coca-cola franchise for Manicaland region, is 63 percent owned by telecommunications giant, Econet Wireless Zimbabwe.
Border Timbers International sold
Border Timbers Limited value additional subsidiary in Mutare, Border Timbers International was sold to Sure Seal as a going concern as of 25 April 2014.
Sure Seal is owned by Mr William Tsunhwa and Shadreck Sena who were senior management at BTL.
Border Timbers International exported most of its production to the international market mainly producing wooden doors.
In December 2013 all the BTI employees had been sent on forced leave until April 2014 when they only came back to hear of the new development.
Over 200 employees are said to have been moved to Sure Seal. This is positive as it saved another big company in Manicaland from collapsing rendering hundreds more unemployed.
Valley of Kings multi-million-dollar solar project
A multi-million-dollar solar-power project was earmarked to be in the pipeline to power the whole Valley of Kings Township located 10 kilometres north-west of Mutare along the Mutare-Harare highway.
The project, which will be a partnership with a South African-based company, is set to pioneer large-scale solar energy projects in Zimbabwe.
Valley of Kings, formerly known as Irene Township, is approximately 204 hectares and was officially gazetted as a township by the Southern Rhodesia Town and Planning Act in 1956.
The title-holder of Valley of Kings real estate, Mr Joe Sanhanga, said the solar-energy deal was at an advanced stage, but they were still negotiating on the Build Operate and Transfer agreements, which the investor was particular about before the deal could be sealed.
Manicaland Zanu-PF PCC lobby’s for diamond polishing, cutting industry in Manicaland
In December the Manicaland Zanu-PF Provincial Coordinating Committee adopted a resolution to have Manicaland as the diamond polishing and cutting hub under Governments drive for value addition and beneficiation of all minerals.
Acting Manicaland Zanu-PF chairman, Cde Samuel Undenge raised the motion which was passed by consensus.
The talk about value addition and beneficiation comes on the backdrop of Government plans in 2015 to have Special Economic Zones expected to attract foreign direct investment.
Zimbabwe is estimated to account for at least 25 percent of the global rough diamond supply. Zimbabwe National Chamber of Commerce national president, Mr Hlanganiso Matangaidze is on record to say that in 2012 over $125 million of the Chiadzwa diamonds value additional income was lost to Surat in India creating 60 000 jobs.
The PCC resolution comes as a positive move given that in February Government reduced licence fees for local diamond polishing and cutting firms from $100 000 to $20 000 for 10 years ($2000 per annum).
With Government hoping to create 2.2 million jobs by 2018 under the guidance of ZimAsset, there is definitely need for a multi-sectoral approach to curb the massive company closures and auctioning of properties at the expense of the private sector.
The CZI 2014 Manicaland report looked into several other issues triggering the high cost of doing business that include among others high unit cost of electricity, corruption, high utility charges by local authorities and statutory bodies and bad road infrastructure. It also prompted for labour reforms citing that the current Labour Act was anti-employers, especially on issues pertaining to retrenchment cost and process, wage setting and contract employees.
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