Vusumuzi Dube
Judith Phiri, Business Reporter
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.
In an interview with Sunday News Business, Bulawayo-based exotic tanning specialists, Zambezi Tanners general manager Mr Arnold Britten said rebates were critical for the sector as they try to expand their exports into the continent.
“There is a need for more rebates for the leather sector, as an industry we import everything that we use. There is no local manufacturing of chemicals and that is the major component of tanning we use.
“Just as they have given a rebate to the shoe industry for components, we also feel that the tanning sector needs the same rebate to allow us to import our spares and our chemicals,” said Mr Britten.
“This will greatly assist us to be cost-effective. As we try to penetrate the continent the issue comes down to price competitiveness and that is where the tanning industry is struggling to be competitive with the rest of the region. Our costs are high because we import everything and the cost of importing is high because of the duties, hence the need for more rebates.”
As a sector, he said most of the chemicals were imported from countries such as South Africa, Germany and China among others.
Mr Britten said there was a need for the Government assist the industry come together under one umbrella so that they revitalise the value chain properly.
“Regulations on how the entire industry works are critical so that we do not continue to have raw skins exported with no value addition. This is because the industry cannot come together under one umbrella to decide something as everyone is in different pockets but we need everyone under one controlled umbrella so we can regulate our industry so we really would love Government support,” he said.
Shoemaker, Millennium Footwear, director Mr Stuart Simali said some of the challenges affecting the leather sector included cheap imports dominating the local market which leads to low sales.
“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.
Meanwhile, the country’s trade development and promotion agency, ZimTrade recently revealed that the country was importing about 12,8 million pairs of shoes annually.
Latest trade statistics show that the nation consumes approximately 14,3 million pairs of footwear per annum, made of leather, canvas, synthetics, and plastic.
“It is against this background of untapped potential and significant contribution of the leather sector to the economy that ZimTrade has been working with leading players to improve production efficiencies and quality of products,” said ZimTrade.
“We 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