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Oliver Kazunga Acting Business Editor
A shoe manufacturing firm in Bulawayo, Millennium Footwear, has failed to secure the $200,000 working capital it requires to improve productivity amid revelations that the company’s number of customers has dwindled from about 30 to six. The company is one of the entities in the city that applied for funding under the Distressed Industries and Marginalised Areas Fund last year.
“We did not secure that money ($200,000 working capital) and the situation has been exacerbated by the tight marketing environment which has seen us remaining with three loyal customers in Bulawayo and three others in Harare from about 30 that we had before the market shrank,” said Millennium Footwear managing director Stewart Simali in an interview yesterday.
He said the number of their customers had gone down because they were screening them and only dealing with loyal customers.
“We have screened our customers after learning that from about 30 customers that we had, a majority of them were not paying us after securing their orders,” he said.
The firm, which is located in the Belmont industrial sites, began operations in 2000 when it was outsourcing production from other local companies.
It ceased outsourcing production in 2004.
Presently, Millennium Footwear is operating at 20 percent capacity utilisation due to capital constraints, depressed marketing environment and high cost of production emanating from expensive power.
In the past, the operations of the leather and footwear industry were also being impacted negatively by a shortage of hides because some local stakeholders were exporting raw hides.
Simali said following the introduction of export tax on raw hides this year, supply of the raw material locally has improved.
In the 2014 national budget, Finance and Economic Development Minister Patrick Chinamasa announced that government was
introducing an export tax of $0,75 per kilogramme on raw hides to promote raw value addition.
Raw hides from Zimbabwe were being exported to countries such as South Africa, China and Europe in Italy among others.
Stakeholders in the leather industry have already started working on resuscitating their tanneries to bring back viability to the sector.
Online Reporter