Power cuts cost industry 20pc production time daily

Roberta Katunga Senior Business Reporter
THE local industry is losing at least 20 percent of production time daily due to increased power cuts by Zesa, a situation that might see capacity utilisation in some companies plunging to below 25 percent, captains of industry have warned. Power company Zesa, last week announced a tight load-shedding schedule that will see both households and industry sometimes going for 18 hours without electricity.

Zimbabwe National Chamber of Commerce Matabeleland chapter chairman Mr Crispen Mugova said there was a crisis in the manufacturing sector which is being worsened by power cuts.

He said when power is cut off companies involved in synthetic products, all products being worked on become wastage.
Bakeries, he added, were also losing out if power is cut off during baking.

More worrying, said Mr Mugova, Zesa was failing to provide correct information to allow industry to re-align its production times.
In most cases Zesa has come under fire for failing to adhere to its load-shedding schedule in the process confusing customers.

“We tried to dialogue with them but they are failing to provide us with the information we need to realign our operations. The industry is losing about 20 percent of production time every day,” he said.

He said alternative power like generators was difficult to use in the manufacturing sector as some machines require high voltages to function.
“It is not only the use of machines but internet as well as a lot of business is done online and with erratic power supply and network losses, the position of manufacturers has been worsened. The power surge is also affecting our machinery as we are now experiencing a lot of faults and breakdowns,” said Mr Mugova.

Confederation of Zimbabwe Industries president Mr Busisa Moyo said the industry was already operating at low capacity due to other factors and with the addition of power shortage, it was going to be difficult for most companies to remain afloat.

Capacity utilisation for most companies is hovering between 30 and 35 percent.
“The increased power cuts will further cripple the ailing industries and this could potentially create shortages of commodities in the country,” said Mr Moyo.

However, some of the problems at Zesa, said Mr Moyo, were due to inefficiencies which according to studies have shown that the power utility company was losing between 300-400MW in transmission problems. He said power cuts were likely to have a negative impact on the quest by the country to attract new investment.

“Our membership is extremely worried about embarking on expansion plans at this stage and is not only cutting back but holding back as well on capital raising until power is assured. The inefficiencies in Zesa need to be unmasked as the high cost of electricity and erratic supplies will destroy the industrial ‘survivors’ if not dealt with candidly. Power issues should not add or worsen an already dire situation,” said Mr Moyo.

He added that the cost of utilities in general, levies and charges by parastatals, urban and district councils were generally too high and would continue to hamper industry and eventually decimate the remnant of industry.

He said the country needed a national cost correction framework for charges and efficiency in delivery of business enablers and power is key to this.
“The study conducted last year in October by the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) recommended an ‘internal devaluation’ as the dollar is very strong against our regional peer currencies, a year later we are still waiting for this ‘cost correction’ and/or ‘internal devaluation’ to help industry, mining and business in general to be cost competitive for local demand and exports,” he said.
Zesa spokesperson Mr Fullard Gwasira said the electricity supply situation had been adversely affected by low water levels at Kariba Dam.

He said the company was trying to exempt industry from load-shedding although this has never been the situation on the ground.
“The sector is prioritised in the supply of dedicated power to ensure that industrial activities are not interrupted. However, there are situations where the power supply situation is affected by major faults such as power systems disturbances owing to the interconnectedness of our utilities and issues to deal with plant reliability, where they may get affected, although measures are always in place to ensure that they don’t get interrupted for prolonged periods,” said Mr Gwasira.

Even some companies that have negotiated for dedicated lines at their plants are being affected.
Power generation in Zimbabwe has gone below 1000 MW against a national demand of $2200 MW. He said since the beginning of the year, Zimbabwe Electricy Transmition and Distribution Company had always had a power supply support scheme for winter wheat and tobacco farming wherein they constructively engaged farming bodies like the Zimbabwe Farmers Union (ZFU), Commercial Farmers Union (CFU), Agritex and the Zimbabwe Tobacco Association.