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Lincoln Towindo Harare Bureau—
INDUSTRIES in Zimbabwe are beginning to show embryonic signs of firm recovery owing to aggressive policy interventions by the government, injection of fresh capital and operational innovation by operators. Several manufacturing companies are set to hit the 100 percent capacity utilisation mark next year in response to the changing operating landscape being charted by the government.
The manufacturing sector is projected to grow by 1.6 percent this year up from an initial projection of 1.2 percent.
The recovery is on account of good performance in foodstuffs, drinks, tobacco, and beverages, textiles and ginning, clothing and footwear, non-metallic mineral products subsectors. While the general capacity utilisation remains at 39 percent as at June this year, a steady increase is anticipated as effects of the policy interventions begin to trickle down. Coupled with an influx of fresh Foreign Direct Investment into the country the face of Zimbabwean industry is showing signs of shifting.
While challenges such as utility and infrastructural supply gap, influx, antiquated machinery and equipment, high debt owed by the government, volatility of the South African Rand continue, the Minister of Industry and Commerce, Mike Bimha, said the local manufacturing industry was on a firm recovery path.
Briefing our Harare Bureau on his presentation to the Zanu-PF Central Committee on the state of industry, Minister Bimha said: “A lot of the Central Committee membership had become used to the negative sentiments about the state of industry in Zimbabwe, for them the story about industry in Zimbabwe is that they’re just closing and people are being sent home.
“My presentation was more of looking at opportunities and the thrust of the paper was to indicate what the government was and is doing to address the challenges. There was a lot of applause when I announced that there’s been a drop in the amount of imports as exemplified by the cooking oil sub sector.
“We’ve also removed a number of products from the Open General Import Licence, now importers of those products are required to apply for licences in order to bring in those products. Because they’re now finding it difficult to acquire the licences, because they’re required by law to satisfy us that there’s a shortage before getting the licences, many have gone out of business.
“The result is that this has in turn led to the increased production by local manufacturers to the point that companies like Olivine are now talking of plans to export as a result of the curbing we’ve imposed on imports.”
He said plenary called on the government to expand the removal of more products from the Open General Import Licence. The government was also in the process of legislating the Standards Regulatory Authority that will monitor and assess adherence to standards of some imported wares through the Consignment Based Assessment Programme. In the interim, the government has already contracted French company, Bureau Veritas to do the monitoring.
“Some of the measures involve strengthening Distressed Marginalised Areas Fund and discussions with the RBZ are at an advanced stage to find ways of beefing up DIMAF and Zimbabwe Economic and Trade Revival Fund.”
According to the presentation the government has over the last year introduced interventions that include managing imports, promotion of the Buy Zimbabwe campaign and fiscal reviews as part of measures to stimulate industrial growth.
Partly as a result of the interventions, Delta Beverages established two sorghum beer plants in Chitungwiza and Bulawayo with the Bulawayo plant costing US$17 million to set up. African Distillers has started production of selected ciders and whiskeys, with a new plant for cider manufacturing taking the company’s capacity utilisation to 59 percent.
Dairibord Zimbabwe Holdings Limited invested in a US$4 million sterilised milk plant in Chipinge with the capacity to produce 24 million litres of sterilised milk per annum. Alpha Omega Dairy Company also invested in a chocolate manufacturing plant. Star Africa Corporation refurbished 60 percent of its plant technology with further refurbishments set to take its capacity utilisation to 100 percent.
Olivine Industries through its partnership with Wilmar received a US$29 million capital injection that will witness its cooking oil production capacity grow five times from 1,500 metric tonnes a month to 7,000 metric tonnes.
Quest Motors has begun bus assembling in Mutare, with the downstream effects set to be felt in the glass supply industry, vehicle seat, battery and carpet manufacturers. Deven Engineering in collaboration with Yutong China will begin assembling busses for the local market and export into Sadc and Comesa. Bata Shoe Company through contracting smaller companies to make shoes has resulted in an increase of capacity utilisation from 30 percent to 85 percent.
South Korean technology giant, Samsung will set up a US$10 million television and refrigerator assembly plant next year. A new refrigerator plant set up by Capri this year will increase production levels from 5,000 units to 18,000 units.
Online Reporter