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Conrad Mwanawashe Business Reporter
REDUCING input costs and importation of finished products which can be made in Zimbabwe will see an immediate revival of the milling sector.The parliamentary portfolio on Agriculture, Lands, Mechanisation and Irrigation Development heard last Friday from two of the country’s biggest millers, Blue Ribbon Foods and National Foods Limited, how the high costs of doing business and the impact of cheap imports are affecting production.
Imports of wheat flour remains a big challenge as some countries such as South Africa subsidising their farmers and their products landing cheaper than locally produced goods. This affects producers from retooling and modernising their industries. At Blue Ribbon, which has since returned to production following a $40 million injection from Tanzania’s Bakhresa Group, the portfolio committee heard that there is a huge opportunity in Zimbabwe.
“Our studies have revealed that Zimbabwe is one of the highest countries in terms of production costs. We need to reduce these costs so that our products can start selling outside the country,” said Blue Ribbon general manager in charge of operations and marketing Yusuf Kamau.
The company expects to import equipment into the country but bottlenecks with processing foreign payments are delaying the process. National Foods Limited chief executive officer Michael Lashbrook told the committee that they are at risk as a result of challenges being faced by banks in processing foreign payments.
“Our payments are currently $20 million behind and this is a couple of weeks out of debt. What that means is that while we have the currency in our local account the bank is unable to give us the currency to pay our foreign suppliers,” said Mr Lashbrook.
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