Companies gear for export-led economic revival

TESTIMONIES given by five Norton industrialists offer fresh hope that the export-led industrialisation agenda envisaged by Government is feasible once companies get access to the requisite capital, in some instances as little as US$50 000, to boost their operations.

The move will generate and save the country the much-needed foreign currency, and equally, create thousands of jobs as the country seeks to become a middle income economy with a per capita gross domestic product (GDP) of US$3 500 in the next 12 years.

Last week’s tour of Best Fruit Processors, Dandy, Wilsons Furniture, Central African Batteries (formerly Lucas Batteries) and Hastt Zimbabwe, by Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu, revealed huge scope for economic growth driven by exports.

In his address during the 7th edition of the 2018 ZimTrade exporters’ conference last Thursday, President Emmerson Mnangagwa reaffirmed Government’s desire to have an export-led industrialisation agenda.

Government will soon unveil key economic turnaround measures such as the new Industrial Development Policy, National Trade Policy and the National Export Strategy, to guide the local industrial revolution aimed at generating more foreign currency.

Norton, the sleeping giant

Norton based firms have potential to be critical players in the expected export-led industrialisation programme, with Central African Batteries indicating that it requires US$2,6 million to increase production to optimum levels.

Currently, under judicial management, the company has engaged Homelink (Pvt) Limited for a US$500 000 loan to boost capacity.

The company also wants to start manufacturing crude lead and has a budget of US$20 600 for the initiative.

Mr Paradzai Marufu, a quality inspector and workers’ union chairman at Central African Batteries said at its peak, the company used to export 2 700 batteries to Malawi and Zambia per month.

It would also have orders of up to 9 000 batteries every month to supply locally and regionally.

Said Mr Marufu: “The owners of the company would borrow money from banks such as FBC, but would not invest the money into the business.

“They were also externalising money; if we sent products to Zambia, the money wouldn’t be repatriated and if you look at the list of externalisers published by His Excellency (President Mnangagwa), our company was 11th on the list with US$1 million.

“That affected our company, but once we get capital injection, we can start operating well.”

At its peak, the company had 300 employees and by the time it went under provisional judicial management in March this year, only 131 workers remained.

The company recalled 34 workers as it began toll manufacturing for Chloride Zimbabwe, since May 22, 2018, in a deal where it produces crude lead.

Mr Marufu says Central African Batteries has the potential to generate and save foreign currency since it also produces batteries used at electricity substations and telecommunications boosters.

At the moment, Zesa Holdings and mobile phone companies are importing the batteries from India and China.

Furniture firm in US$238k

Zambia, US & SA jackpot 

Wilsons Furniture CEO Mr Jim Wilson said his company is already exporting to the United States and South Africa, and requires foreign currency to procure raw materials.

Despite the foreign currency challenges, the business continues to grow and is expected to open a fourth factory measuring 4 000 square metre factory in Norton.

“We are obviously growing our exports, we export about 35 percent to 40 percent of our production and we would like to take that to 50 percent.

“The challenge is to continue getting raw materials for the manufacture of our products,” said Mr Wilson.

The company imports chip board, foam and fabric, among other raw materials that are not manufactured locally.

However, Mr Wilson believes the reintroduction of foreign currency accounts (FCAs), as recently announced by RBZ Governor Dr John Mangudya, will help the company navigate its key challenges.

Wilsons Furniture, which started operations in 1958, supplies one container of billiard tables per month to the US and there are plans to ramp up exports next year considering that orders from their distributor are gradually increasing from the current average of US$80 000 to US$100 000 per month.

Billiard tables fetch an average of US$800 each. The company also has a long-term relationship with Ellerines of Zambia, where it has guaranteed orders of US$30 000 at a time.

They have also secured regular orders from Southgate Furniture of Zambia for close to $40 000 at a time.

Wilsons Furniture mainly exports bedroom suites, dining-room suites and occasional furniture, to Zambia.

However, in recent years it lost a large slice of its South African market share to Malaysian, Chinese and Brazilian firms.

It is, nonetheless, clawing back and has already supplied orders worth R200 000 (US$13 500). It has also confirmed orders worth R1 million (US$67 500) until year end.

The company employs 350 people and will increase the number to over 400 when the new factory opens.

It is operating at 75 percent capacity, producing a range of household, hotel and office furniture.

Dandy and Best Fruit

Processors lay claim

Best Fruit Processors CEO Mr Asere Shumba says they are already exploring export opportunities after saturating the local market with fruit paste.

Imports, however, continue to threaten the company’s operations.

Said Mr Shumba: “What we would request is, given the foreign currency situation, is to stop the importation of paste as it is available here in the country.”

Continued importation of tomato paste is affecting the uptake of tomatoes from farmers contracted by the firm since 2015.

Best Fruit Processors has 180 contract employees.

Dandy, which recently invested $250 000 into plant equipment, has seen capacity utilisation surging to 47 percent from 21 percent in the first half of 2016.

The jump in capacity is attributed to Statutory Instrument 64 of 2016, which has since been upgraded to SI122 of 2017.

Ordinarily, the company exports 60 percent of its production but is being bogged down by foreign currency shortages.

Factory manager Mr Wisdom Nyakuzviranga said they are currently exporting 30 percent of their production.

Dandy makes about 200 000 tonnes of bubble gums and chewing gums per month.

Hastt seeks US$5m

Agricultural mechanisation equipment manufacturer Hastt Zimbabwe requires US$5 million to triple production and create another 100 jobs, says general manager Mr Abdulkader Mahomed.

“The challenges are common. They are about getting foreign currency for raw materials.

“We also need to upgrade our machinery which is, as you have seen, quite old.

“We experience breakdowns and so on and to get everything running, tripling the production as well as creating another 100 jobs, we looking at about US$5 million,” said Mr Mahomed.

Production capacity at the company is at about 30 percent but there is scope for growth to cut imports.

Hastt employs 45 people but the number can rise to 70 when the foreign currency situation improves.

Hastt produces equipment related to ploughing, planting, fertiliser distribution and maize shelling.

These can be for both tractor and animal drawn implements.

The tour of industries in Norton was organised by the area’s House of Assembly Member, Mr Temba Mliswa.

Minister Ndlovu said such tours should be replicated across the country to establish each constituency’s contribution to GDP, in line with Government’s thrust towards devolution.