Vusumuzi Dube
Judith Phiri, Business Reporter
LOCAL leather sector players are being forced to scale down their shoe production output due to intense market pressures from an influx of cheap imports.
Zimbabwe is grappling with a surge in leather product imports, which negatively impacts the viability of domestic shoe manufacturers.
Statistics from ZimTrade, the country’s trade development and promotion agency, indicate that Zimbabwe imports around 12,8 million pairs of shoes annually.
Meanwhile, the total footwear consumption in the country including leather, canvas, synthetics and plastic — averages approximately 14,3 million pairs per year.
Responding to questions from Sunday News Business, Bulawayo-based exotic tanning specialists, Zambezi Tanners general manager, Mr Arnold Britten said the influx of cheap imports also had a downstream effect on the leather sector.
“Demand has significantly dropped, due to a decline in production output by local leather goods manufacturers. The decline is a direct result of imports of safety and school footwear. This has resulted in a decline in local production output, with a downstream effect of low demand for leather,” he said.
He said the operating environment was likely to improve on the back of solid support from the Government with effective oversight to regulate local content in the market.
Zimbabwe Leather Development Council (ZLDC) managing director and secretary, Mr Jacob Nyathi said cheap imports were causing unfair competition for leather sector players.
“Technically, all such imports are legally subject to punitive import duties but strangely they still come in somehow and get sold at lower prices compared to local products, meaning maybe the correct duties are not being collected or that the bulk of the imports are coming through undesignated entry points and thus avoiding paying duties and other levies,” he said.
Giving rough estimations, he said the wholesale landing prices for safety shoes were estimated between US$9 to US$13 and anything between US$7 to US$9 for school shoes.
Mr Nyathi said these can retail for US$20 to US$25 for safety shoes and US$10 to US$12 for school shoes on the market compared to locally produced safety shoes that are retailing above US$30 and school shoes for US$18 to US$22, respectively.
In a previous interview, shoemaker, Millennium Footwear, director Mr Stuart Simali said cheap imports that have dominated the local market have led to low sales for leather sector players.
“This also leads to low capacity utilisation for companies in the leather sector and as a result, we witness high prices making our products uncompetitive on the export market, at the end of the day we record low export volumes.”
He said the hyperinflation environment currently witnessed in the country was also affecting the leather industry, which has been left in a dire situation.
Players in the leather sector have called on the Government to ensure that the sector gets more rebates, which will reduce the sector’s raw materials importing expenses and make them to be cost-effective.
Rebates offer a full or partial exemption of customs duty on imported raw materials.
As a sector, most of the chemicals used were imported from countries such as South Africa, Germany and China, among others.
Due to the increased shoe imports, ZimTrade has been working with leading players to improve production efficiencies and quality of products nationwide.
They have been providing technical intervention programmes aimed at repositioning Zimbabwe’s leather sector as one of the country’s leading exporters and foreign currency earners.
Online Reporter