admin
Business Reporter
THE Confederation of Zimbabwe Industries is worried that a shortage of working capital and delays in importing critical raw materials might conspire to reduce the supply of commodities on local supermarket shop shelves, it has been learnt.The industry representative body has engaged Government and the Reserve Bank of Zimbabwe to assist companies, particularly those that benefited from the imported restrictions effected by Government in July, to get cheap working capital.
Statutory Instrument 64 of 2016 restricts the importation of 42 commodities that can easily be substituted with locally-produced goods. In addition to increasing capacity, CZI is also pushing companies to increase the quality of their product offering.
CZI vice president Mr Sifelani Jabangwe told The Sunday Mail Business last week that negotiations with the RBZ for funding facilities were currently underway.
“We are very happy to announce that a number of manufacturing companies are significantly improving in terms of capacity utilisation, but that on its own is not enough as more working capital is needed to push these companies to full throttle.
“For companies to increase capacity utilisation, they need financial resources to buy raw materials and we should improve on our importing timeframe for raw materials from a period of (between) two weeks to five weeks to avert possible commodity shortages.
“The programme is targeting all critical sectors of the manufacturing industry whose goods are protected by the provisions of Statutory Instrument 64 of 2016.
“Manufacturers are faced with high interest rates at the banks (of around 15 percent), thus CZI is lobbying to monetary authorities to avail loans with lower rates or competitive rates of interests.
“Lower interest rates will give manufacturers an opportunity to capitalise on SI64 provisions and repay the loans in time as they will be affordable,” said Mr Jabangwe.
As a result of Government’s intervention, several companies that have been shielded from foreign goods are showing nascent signs of recovery.
Tregers Limited, which produces a wide range of products that include plastics and woven bags, has since increased its production capacity to 45 percent from 35 percent, while its plastic division is now operating at more than 80 percent capacity.
Also, more than 166 jobs have been added in order to cope with increased activity. The company’s Monarch division, which produces windows and Kango products, has also recalled some of the workers it had retrenched.
Personal care products manufacturer Datlabs has similarly reported a 60 percent increase in Camphor sales. The Minister of Industry and Commerce, Mr Mike Bimha, said re-tooling was crucial to revive the company’s manufacturing sector.
“We have put in place some measures towards re-tooling the manufacturing industry of all the critical areas under SI 64.
“Government is accessing funding through RBZ, Southern African Development Community and Common Market for Eastern and Southern Africa to ensure that all those companies protected under the SI64 requirements will go a long way in resuscitating the industry.
“We will be approaching the companies that benefited from SI64 so that they receive funding,” said Minister Bimha.
The import control measure is expected to last between two to three years in order to afford local industry the time to recover.
Online Reporter