The ManicaPost
Ngoni Dapira Business Correspondent
The once hustling and bustling Nyakamete Industrial Area in Mutare is virtually dead and resembles a cemetery. Large-scale manufacturing industries have shut down, a few remaining are now operating below capacity utilisation, and subletting their premises to small business operators.
A tour of the industrial location by The Manica Post on Monday was alarming with most companies, including the Small to Medium Enterprises, complaining that business was hard present-day and Government should quickly intervene to improve the liquidity crisis in the country and control the high import plague affecting local manufacturers.
The most recent large-scale company to close shop in the area is the Manicaland Cotton Company of Zimbabwe, which is Southern Africa’s leading cotton buying, processing and marketing organisation.
The Manicaland Cottco unit is actually in the process of relocating to Harare with unconfirmed reports indicating that the premise would soon be leased out to Mega Market, the frozen and dried foods distribution company.
First to go down in 2011 was the paper-making manufacturing giant Mutare Board and Paper Mills followed by Karina Textiles, one of the largest textiles companies in the country, which is currently under liquidation.
The premises of Mutare Board and Paper Mills are now being leased to schools, vehicle repair companies and non-governmental organisations for storage of food.
Border Timbers Limited that last year retrenched several employees has been struggling and this year decided to forgo its value-addition entity, Border Timbers International.
Cairns Food, which has been under judicial management for a while, is said to be operating below 10 percent capacity utilisation.
Other key manufacturing industries operating below capacity include Quest Motors, Manica Boards and Doors, Kenrose Filters, PG Safety Glass and Wattle Company.
Most people in business have pointed out that there is need for quick action by Government before there is total collapse of industry with big companies countrywide already under judicial management or liquidation.
It is a sad state to drive past Karina Textiles and see the once illustrious enterprise lifeless with a sign post by the gate written, ‘‘Karina Property for sale on behalf of liquidator.’’
For the engineering and iron and steel companies business has virtually come to a halt and most are closing shop.
Tombs Engineering has since closed down whilst Eastern Districts and NT Engineering are virtually struggling to stay in operation.
The director of NT Engineering, Mr Aubrey Tinorwa, said they have since stopped some of their core engineering business and now lease some of the workshops to SMEs just to get extra cash and remain in operation.
“The manufacturing and engineering industry has greatly gone down. We have become an import nation and this has greatly affected business for us manufacturers.
“We make window frames, door frames, sliding doors and several foundry products especially for commercial farmers, but you find that most hardwares now import these and bypass us for cheap imports.
“I have since closed my foundry operations and leased the workshop to some carpentry entrepreneurs and other SME players just to keep this place open and be able to pay the water and electricity bills,” said Mr Tinorwa.
He added that although some banks were giving out loans to the manufacturing sector, the interest rates were high and short term, which would be a high risk.
He said what was killing the industry was the liquidity crunch.
“Parastatals and building contractors used to be our biggest customers but most are struggling as well so we are left with individuals building houses.
“Of which, apart from the competition posed by cheap imports, it is now a dog-eat-dog world among us manufacturers, with other players like Radar Holdings Ltd reducing prices to ridiculous levels.
“A standard door frame is being sold for $16 instead of $19. The sad thing is it’s the quality that differentiates the prices, but the present-day consumers because of the liquidity challenges opt for cheap things and not quality,” he said.
The issue of the influx of imports at the expense of local manufacturers continues unabated to haunt local manufacturing industries.
