Sunday News (Zimbabwe)

SMEs urged to form clusters

- Njabulo Bhebe Business Reporter

THE Bulawayo Leather Cluster has challenged small-to-medium entreprene­urs (SMEs) in various sectors of the economy to come up with business clusters so as to enhance productivi­ty and profitabil­ity of their entities.

In an interview with Sunday News Business during a tour of the Bulawayo Leather Cluster factory by the European Union ambassador to Zimbabwe Mr Timo Olkkonen recently, the organisati­on’s secretary-general Mr Fungai Zvinondira­mba said clusters remained the most viable way to catapult the growth and expansion of SMEs.

“The cluster system is the easiest way in which SMEs can be empowered to really run formal businesses because in clusters we meet and we share ideas, skills and encourage each other to formalise our operations. This is why I urge that SMEs must embrace the cluster system to facilitate their growth.

“There is no reason for one to operate a backyard business, clusters have accorded us an opportunit­y to engage in a common place to work where we have to formalise. So, the cluster management itself is designed in a manner in which it also trains other members to formalise and run their business formally,” he said.

A business cluster is a geographic concentrat­ion of inter-connected businesses and associated institutio­ns in a particular field. Clusters are considered to increase the productivi­ty with which companies can compete nationally and globally. Mr Zvinondira­mba said the Bulawayo Leather Cluster had managed to grab a substantia­l niche market locally and plans were already underway to explore the export market.

“We have a local market that has showed keen interest in our products with some buying most of our products for resale. The factory is producing about 450 pairs of shoes per day and we have been working on an order of about 450 pairs that is bound for Namibia in the few coming weeks,” he said

The cluster system involves housing business units that are in the same line of work under one roof and having them order materials communally. The leather cluster concept was introduced in Southern Africa by the Common Market for Eastern and Southern Africa (Comesa) secretaryg­eneral Mr Sindiso Ngwenya in 2011 to replicate the ones in Ethiopia with Bulawayo Leather Cluster being the first such institute in the country.

Bulawayo Leather Cluster’s factory started operations in 2018. The factory, whose workers underwent specialise­d training that was conducted by a shoe manufactur­ing expert brought in by Comesa, has a capacity to produce about 158 400 pairs of shoes annually.

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