The Sunday Mail
Livingstone Marufu
Over US$100 million has been invested in Zimbabwe since the adoption of import controls, with several international enterprises setting up shop locally.
About US$12 million of this sum has gone towards retooling while the new factories have created significant employment.
Information from the Confederation of Zimbabwe Industries indicates that among the investors are Zambian, South African and Singaporan companies.
Zimbabwean-owned firms are also boosting efficiency, “taking advantage of the policy space to upgrade machinery”.
CZI senior economist Ms Dephine Mazambani told The Sunday Mail, ‘’Willowton Group (South Africa) is building a US$40 million factory in Mutare to produce cooking oil and soap. Trade Kings (Zambia) is putting up a US$15 million state-of-the-art detergent plant in Harare.
“Varun Beverages (India) is building a US$30 million pepsi bottling plant in Harare. And also various South African companies have expressed interest in investing in Zimbabwe. Probands, Proplastics and Arenel have investments of a cumulative US$5 million-plus.”
On retooling, Ms Mazambani said: “Investing in new technology will improve production efficiency, and products will be competitive against imports. Chloride Zimbabwe, a subsidiary of ART Corporation, commissioned new technology for manufacturing lead acid batteries worth US$3 million.
Production capacity is now at full level (240 000-360 000 units per month), with 300 workers.
“Nespot Holdings, which is a local manufacturer of detergents, recently invested in bottle-blowing machinery and an automated packing line valued at US$3 million. The company recently introduced a new product (a washing powder) to the market.
“Dairibord Zimbabwe also invested in a US$5, 8 million state-of-the-art Maheu-making plant at its Chitungwiza branch. Probrands has set up a creamer-making plant following a joint venture partnership formed at the end of 2016.”
Economist Mr Persistence Gwanyanya said:”The investment partly reflects the impact of SI 64 and the determination to improve the investment environment through commitment in the implementation of ease of doing business reforms.
“This is very crucial to the extent that SI 64 is a short term measure, which, in a way, indirectly assisted in attracting investment. The investment, just like school fees, nurtures employment and capacity utilisation in the long-run.”
Zimbabwe introduced Statutory Instrument 64 in 2016 to curtail importation of products that can be manufactured domestically.
Government statistics show that the import bill has declined by US$1, 1 billion since then.
According to the 2016 CZI Manufacturing Sector Survey, industrial capacity utilisation increased from 34, 3 percent to 47,3 percent.
The yeast sub-sector was on the brink, but is now at 90 percent operating capacity while biscuit manufacturing has increased from 35 percent to around 75 percent.
Furniture production is now at 70 percent, up from 45 percent, and the detergent industry has moved from 30 percent to 60 percent.
Employment across sectors has also leapt from 2 663 to 3 423 workers.
In addition, SI 64 has created opportunities for value chain players, particularly packaging suppliers, and agro-processors.
However, some products under import control are being brought into Zimbabwe illegally, with authorities working on sustainable anti-smuggling measures.
