Ca­pac­ity util­i­sa­tion im­proves: ZNCC

Chronicle (Zimbabwe) - - Business - Enacy Ma­pakame

CA­PAC­ITY util­i­sa­tion in the man­u­fac­tur­ing sec­tor has im­proved sig­nif­i­cantly fol­low­ing the in­tro­duc­tion of Statu­tory In­stru­ment 64 of 2016, which re­stricts im­ports of se­lected prod­ucts that can be man­u­fac­tured by lo­cal com­pa­nies, in­dus­try of­fi­cials have said.

The Gov­ern­ment re­cently in­tro­duced the SI 64 of 2016 that re­moved cer­tain prod­ucts from the open gen­eral im­port li­cence to en­hance lo­cal pro­duc­tion.

Re­sul­tantly, some com­pa­nies are reg­is­ter­ing growth in vol­umes and ca­pac­ity, with some even fail­ing to meet the grow­ing de­mand.

Zim­babwe Na­tional Cham­ber of Com­merce pres­i­dent Mr Dav­i­son Norupiri told our Harare Bureau that ca­pac­ity had sig­nif­i­cantly im­proved in the milling, pack­ag­ing, corn snack, food pro­cess­ing and ed­i­ble oil in­dus­tries.

“Most of the com­pa­nies on the list were op­er­at­ing at around 30 per­cent but I can safely say they are now above 65 per­cent be­cause of the pro­mul­ga­tion of the SI 64.

“The milling in­dus­try is fail­ing to cope with the de­mand; they did not an­tic­i­pate the in­creased de­mand. The corn snacks are now around 90 per­cent and pack­ag­ing in­dus­try are fail­ing to cope while some of them are run­ning out of raw ma­te­ri­als,” he said.

The lo­cal in­dus­try has been op­er­at­ing be­low its po­ten­tial due to the use of ob­so­lete equip­ment, liq­uid­ity con­straints and un­fair com­pe­ti­tion from im­ports which are usu­ally priced lower than lo­cally man­u­fac­tured goods.

Ca­pac­ity util­i­sa­tion for lo­cal in­dus­try has been on free fall, plung­ing to 34 per­cent in 2015, ac­cord­ing to the Con­fed­er­a­tion of Zim­babwe In­dus­tries’ man­u­fac­tur­ing sec­tor sur­vey re­port.

Im­ports have been cited as one of the biggest chal­lenges af­fect­ing lo­cal man­u­fac­tur­ing with cap­tains of in­dus­try call­ing for their ban.

Mr Norupiri added the pro­mul­ga­tion of SI 64 of 2016 had also boosted busi­ness for up­stream and down­stream in­dus­tries si­mul­ta­ne­ously cre­at­ing em­ploy­ment.

“We have a num­ber of farm­ers who are ben­e­fit­ing be­cause they are now sell­ing their pro­duce to lo­cal pro­ces­sors. We are happy this has ac­tu­ally cre­ated ap­petite for investors in the coun­try. We have a soap man­u­fac­tur­ing com­pany that wants to open its doors in a few months and a cook­ing oil com­pany open­ing in Mutare,” he said.

In­dus­try and Com­merce Deputy Min­is­ter Chi­ratidzo Mabuwa said the Gov­ern­ment was com­mit­ted to cre­at­ing a con­ducive en­vi­ron­ment for lo­cal busi­ness to thrive.“When busi­ness makes money, they cre­ate jobs and lu­bri­cate the fis­cus,” she said.

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