admin
Oliver Kazunga, Senior Business Reporter
INDUSTRY and Commerce Deputy Minister Raj Modi has advised companies to negotiate with their customers to pay them partly in foreign currency to enhance importation of key raw materials.
Speaking to Shepco Group of Companies’ management during a briefing after touring one of the entity’s subsidiaries, Shepco BMA Fasteners in Bulawayo’s Belmont industrial site on Tuesday, Deputy Minister Modi said:
“You have to deal with the forex challenge. You can talk to any of your mining customers that you supply to pay in forex, that can help you get some forex.
“Everybody is doing that on the market. They can pay part of it in forex and part of it in RTGS dollars.
“So it’s helping them that way. That’s my suggestion, so it can work for you also as it has worked for others.”
Shepco BMA Fasteners general manager, Mr Bernard Katenjele, had told Deputy Minister Modi that his organisation last received forex allocation from the Reserve Bank of Zimbabwe in September last year.
“So what has happened now is that we have been forced to use all the money that we had in the banking system in RTGS because we couldn’t get the forex.
“We had a breakfast meeting with Mangaliso Ndlovu (Industry and Commerce Minister) on Friday last week and our sentiments that we put across is that for now the interbank system is not working; people are failing to access the money,” he said.
Mr Katenjele said manufacturing firms in the city risk going down further if the forex situation in the country persists. Due to this problem, he said, Shepco BMA Fasteners last December was forced to retrench 20 workers out of 70.
“We are likely to retrench 20 or so at the end of March. They used to be on six months contracts but we have reduced the contracts period further down to three months. We were hoping that by last December we would be 100 or even more,” he said.
The firm has an installed capacity of 400 tonnes or more of steel throughput per month and used to employ over 700 people. Apart from the forex constraints, the company also requires funding to recapitalise and retool as most of its plant equipment is archaic.
The company requires between US$25 000 and US$50 000 per week to import raw materials from South Africa. Shepco Industrial Supplies general manager Mr Ezekiel Masanganise said the absence of Zisco Steel in the country was impacting negatively on a number of companies.
“All our raw materials at the moment come from South Africa and if Zisco can come back on board it will have a positive impact on our operations,” he said.
At the moment Shepco is not exporting but predominantly supplies the mining sector with underground support material.
“We have so much confidence that our products meet the standards and are very competitive in terms of quality.
“But in terms of cost per unit and because our foreign counterparts in South Africa are close to the steel, their price per kilogramme is lower than ours. So, we need to have the revival of Zisco in order for us to get that competitive advantage,” Mr Masanganise said.
The firm urged Government to maintain import restriction to support local firms.
Shepco is one of the few companies that have successfully applied for the Special Economic Zones (SEZs) status in Bulawayo and plans to expand its existing business project through a $2 million capital injection into general machining and engineering.
— @okazunga.
Online Reporter