adminDuring the decade-long economic downturn brought about when the West decided to impose economic sanctions on Zimbabwe in retaliation for the land reform programme, the company suffered from the after-effects of the economic embargo as inflation went haywire and it became impossible for most businesses to maintain production. Buying new shoes also became a luxury for most of its customers.
As a result of the economic problems facing the country then, production at Bata slumped to below 20 percent and many employees were sent home as it became unsustainable to maintain a large workforce in the face of falling output.
The economy has, since 2009 when the country introduced multi-currency, been slowly improving. Despite stiff competition from cheaper imports which most Zimbabweans now prefer, Bata Shoe Company has witnessed an upsurge in production.
According to the managing director Mr Louis Pinto, the once giant shoe manufacturer was on a recovery path and producing 50 000 pairs of shoes a week, representing 70 percent of its capacity, with production expected to shoot to 70 000 pairs.
It is expected that 400 new jobs would be created once the company starts operating at full capacity.
Despite the improvement in capacity utilisation, Bata still faces challenges which are also hindering growth of other companies.
These challenges have been highlighted before but it seems that the powers that be are not doing anything to rectify the situation.
According to Bata management, the company was paying $25 000 towards its monthly electricity bill and $10 000 for water. A simple calculation shows that no less than $35 000 a month (or $420 000 a year) is going towards service charges.
This amount is way too much and we feel that most companies in Zimbabwe are failing to perform because of the outrageous charges by service providers. Instead of assisting business to prosper, the country’s utilities are stifling the growth of industry.
Surely, how can one company pay $35 000 a month for electricity and water and remain viable? And Bata is not alone in this quagmire.
Utilities have in the past been called to review their charges to take into consideration the situation in the country but it seems that the Zimdollar mentality has set in in the minds of most of our service providers who want to make a “quick buck”.
We hope that Industry and Commerce Deputy Minister Mike Bimha, who was on a tour of Bata and other companies in Gweru last week, will take the concerns raised to Government so that the issue is addressed as a matter of urgency.
At one time Cabinet set up a committee on cost drivers and in 2010 the Competition and Tariff Competition held much publicised hearings on Zesa which came up with plausible recommendations on the pricing of electricity but up to now business and the public at large are yet to benefit from the CTC recommendations.
We urge Government to take the concerns of industry regarding service charges seriously because for their products to be competitive against imports, utilities must charge reasonably.
Online Reporter