adminThe entrepreneurs produce goods such as grinding mills, irrigation filter tanks and sliding gates, among others, which are sold to large companies for resell.
In separate interviews, the small-scale entrepreneurs said their customers were ripping them off as they preferred to buy the products at lower prices, making it difficult for the producers to meet production costs.
They said it was disheartening to note that their customers were selling the goods to end-users at higher margins.
An official at Royal Procurement Services, which manufactures products such as grinding mills said:
“There are a lot of challenges we are facing. Our customers who are big companies are compelling us to reduce our prices to the extent that we are not able to recoup production costs. But when these big companies sell to the end-user we are surprised to learn that their mark-ups are very high,” said the company’s managing director Mr Francis Dhibha.
As small players, he said, they were being dominated by big companies that are well-established in business.
“There are some big companies that I cannot mention because of professional reasons, they come and negotiate with us and end up getting the grinding mills at $800 instead of $2 500.”
He said on the market in Bulawayo the grinding mills price ranged between $4 000 and $4 500, adding that this was unfair considering the high profit margins the companies were enjoying.
“We buy the material to produce the mills from Malawi,” he said.
Mr Dhibha said they were planning to get a place also in the city to display their products.
Other entrepreneurs in the engineering sector who preferred not to be named echoed similar sentiments adding that they were experiencing low sales because they were operating from hidden premises and wished to be well-known.
Online Reporter