Capacity utilisation improves: ZNCC
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.