Mutare companies in dire straits

INDUSTRIES in Mutare have receded into a comatose state as factories that used to drive the province’s industrial engine have been reduced to empty shells.

OBEY MANAYITI

A recent snap survey of former huge business entities by NewsDay during a recent tour of distressed industries by the Minister of State in the President’s Office Didymus Mutasa showed that most of the industries were operating below 20% capacity.

A host of challenges, including under-capitalisation, high production costs and competition from foreign products are cited as the push factors that have hounded some big economic players out of business.

Manicaland Business Action Group (MBAG) advisor Bezel Nyabadza described the situation as dire, adding that urgent intervention should be considered by both the government and private sector.
“We visited a graveyard of companies who were yesterday household names and they are now history,” he said.

“What we saw in some of the companies needs maximum intervention.
“We need a community trust which should be generating revenue for the province.”

The struggling companies include Manicaland Bricks, Cairns Foods, Mutare Board and Paper Mills, Fusalite, Karina and Quest Motors.
At Mutare Cairns Foods — a former leading jam, baked beans and tomato sauce producer — the operations director Joseph Mavu said they were now operating below 10% and they had been forced to lay off more than 500 workers.

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The future, he said, was gloomy.

He said they were facing stiff competition from cheap foreign products.

Mutare Board and Paper Mills is now an empty shell without any sign of life.

The machinery has been dismounted and the factories have been converted into backyard garages, restaurants and schools.

For years, the eastern border city has been sustained by the forestry industry, but now almost every company dealing with timber production has been pushed out of business.

Officials at Manica Board and Doors said they were, however, recovering from poor production following the recent capitalisation of their operations.

One of the largest glass producers in the country, Afri-Safety Glass Private Limited, who are manufacturers of fusalite safety glass, had the capacity to produce more than 50 000 units of windscreens per month, but due to poor business they were operating below capacity.

Quest Motors Corporation, one of the biggest car assemblers in Zimbabwe and has been in the business for more than 60 years, has also fallen on hard times.

Quest Motor Corporation director Tarik Adam urged the government to treat the case as a matter of urgency.

“We are currently facing stiff challenges in the automobile industry in Zimbabwe,” he said.

“We are currently operating at less than 5% capacity, which is not sustainable.

“We find that new cars are coming across the border from South Africa and these cars are being subsidised by the South African government.

“How can we compete with these companies when they have government subsidies?

“We need to protect our industries for our country’s future. Our government must intervene.”

The list of distressed industries in Mutare is endless and MBAG members suggested that the government must make the Distressed Industries and Marginalised Areas Fund a reality and help struggling companies in Manicaland to avert social disaster.

MBAG spokesperson Charles Samuriwo said political will was needed among all the stakeholders in the province to save the situation.
He also expressed concern on the fate of thousands of employees laid off following the closure of several industries.

Mutasa said the government will explore ways of assisting several distressed industries in Mutare.

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21 Comments

  1. pliz if Botswana can have a sovereign wealth fund coz of diamonds and we have been mining them since 06 and we are have them more than Botswana and are failing to capitalize our industries and diverting attention towards upfumi kuvanhu something is seriously wrong

    1. hey, diamonds are not for the general publich ok…keep your mouth shut and continue suffering.

  2. I think our products are too expensive. We cannot justify the prices we charge on our goods. If a foreign good is manufactured elsewhere then transported over thousands of kilometers then lands on our shelves at a very low price we should ask ourselves ‘how do they do it? If we get the answers we apply the same strategies and our goods will be competitive then our industries should kick off. the trick should be to sell more goods at a cheaper price than sell very little at exorbitant prices. Don’t expect me to buy an expensive toothbrush just because it was made by museyamwa.

    1. The profit margins we expect were influenced by the Zim $ era. Can you imagine a packet of lobels biscuits was retailing for $3 in april 2009, now it’s 35c ( thirty five cents ) after stiff South African competition. You ask yourself what changed. It was just a rotten business mentality.

    2. I was checking fridge prices made locally,it was cheaper to import from SA.Ridiculous.

    3. We got to realise that our industries are failing to charge lower prices than our foreign competitors because of two main factors.
      a) Our costs of production are just too high. If you check how much you spend in producing a product in Zimbabwe from the regulatory fees, licences, taxes, zesa, water bills… we can not match with our foreign competitors.
      c) But more importantly our companies need capitalisation. We need to change the technology in our industries. We are using outdated machinery which is costly to run and operate thus translating to expensive unit costs. Our companies need capitalisation to transform them to advanced production technologies.

  3. The whole of zimbabwe there is no industry,harare is surviving because it is the capital but besides government offices and wholesalers it has nothing industry wise also it’s a national problem not bulawayo problem as i heared people say before

    1. Actually it’s a world wide problem ever since the Chinese began invading the world. Car assembling plants, textile companies, toy companies, electrical and electronic companies inthe Americas and Europe vakadzupura dzupura their plants kudhara and relocated to China attracted by cheap labour and a 1.3 billion market.

    2. Phunyukabemphethe

      Mbizo, if its national, does that make it right or acceptable?

  4. Thats a very good piece of free advice Rangwani.Our industries here in Zim have a serious problem of charging exorbitant prices on anything manufactured locally when those imported are very cheap and of good quality as well.One wonders as to why these industries will survive.I think the SPQR conceipt[Small Profit Quick Return] must be implemented to ensure that they survive and without that i assure you that even if you get someone from Mars you will not succed in this kind of environment where quality goods are cheaper than those locally produced for the sake of promoting anaMuseyamwa vataurwa naRangwani ava.Your prices are the MAJOR hindrance and the same to this ethanol blending plant which sells its locally produced fuel way beyond or exactly the same price with the imported one which is pure.Its pointless to set up such a plant when the price is just the same so revisit your formula so a to come up with feasible conclusions.

  5. Mutasa Mudhidhimas

    Ndakambonzwa vanhu veZanu pf vachiti macompany ese ari kuvhara isabotage saka revolutionary party will take over and run the companies.Ko why are they not doing that when people are being laid off.Why concentrate on viable companies like Zimplats
    Vanhu kana muchida henyu kufa muchishupika and muri marombe VHOTERAI ZANU PF in 201
    Musati hamuna kuudzwa

  6. Zanunoids have killed our economy.ini nyaya inondinetsa ndeekui why is the Botswana Defence Forces nt involved in diamond mining.its a gd example of hw paranoid these Zanunoids are.look at hw they rush to get involved in precious minerals like platinum,diamond,gold.why are they nt stampeding fo dolomite at Alaska?bkz hapana mari yavanoba.they plungf Ziscosteel,Mhangura.nw they have targetted emeralds at Sandawana bkz they r precious.that revenue was suppozd to have revived the collapsing companies nt only in Mutare bt nationally.its going to b difficult to return home wn we r already gathered at the companies cemetary.

  7. Great Zimbabwe

    When I hear people of Mutare complaining about collapse of industries, I wonder as to the nature of those industries. When people from Bulawayo complain bitterly about deindustrialization, I wonder genuinely about the concept of industrialization, which has eluded a greater part of this country. Masvingo Province, for example, does not have any industry and that has been the case for decades. The argument that the province is drought prone and generally lie in poor resource belt is frivolous. The truth is that the country has witnessed a sustained decimation of industry. The future of Zimbabwe lie in value addition of commodities through innovative manufacturing technology. If we, as a nation, superintend this process we would have planted the seeds of poverty, and the next generation will surely harvest bushels and bushels of indigence!

  8. The whole country is now comatose thanks to mdidymus and his colleagues kuzanu

  9. We look at zim dollar pricing and the way we do business is get rich quick. Look cooking oil from Zimbabwe is more expensive than one from RSA, why? Cost of production whats the difference, cost of maintaining the directors is expensive in Zimbabwe period. he has a heft salary, fuel allowance equivalent to the salary of three employees, education allowance for his kids, housing allowance, a car for his wife, holiday allowance every three months, entertainment allowance, and they say because he is educated but the company is suffering because of his education. We are told fuel price, energy price and the like compares well with other counries so what are we talking about when we talk of cost of production. In Chitungwiza companies would get grace period before paying licences to the authorities to encourage them to start factories there but still failed because of financing luxuries of bosses. So as long as we stop these stupid luxuries our cost of production will be very high and our goods will not compete on the market and factories will close. Why should a jean from truworth factory cost more than a jean from thousands of kilometres from home? Saviour is busy abusing viable enterprises without looking at failed factories instead of putting more effort in reviving these he is destroying those which are still standing. Maize meal from RSA is cheaper than ours here yet you here local companies saying we are importing maize. A milling company in RSA buys its maize in RSA and exports maize meal to Zimbabwe cheap. A company in Zimbabwe imports maize from RSA and sells maize meal more epensive so are they telling us that the maize they buy is priced higher than the one bouht by their counterparts in RSA?

  10. Ed-I have been contributing to these pages for eons, when did I become a spammer?

  11. Pliz dnt label me a spammer.since when???????Please spare me!

  12. Phunyukabemphethe

    Surprisingly, these are some of the very same people opposed to devolution. Again instead of joining Mthwakazi in fighting Gukurahundis over lack of development, these are some of the people who are always attacking Mthwakazi for complaining about lack of development.

  13. Phunyukabemphethe

    Why are Zimbabweans destroying their own country like this – please I need an answer?

  14. You are dead right my friend. Zimbabwe businesses were used to the practice of ripping off customers before they got competition from goods coming from outside the country. Now they are crying foul, Today’s business world is very dynamic, what sold well yesterday will not necessarily sell tomorrow.

    How much is the cheapest car from Quest? I bet not less than $10 000. What percentage of the population can afford that sort of price? No wonder they are operating at 5% capacity, there is just no demand for their cars. If on the other hand they were innovative like Tata of India which introduced a car for $1500 for the poor, they would have been enjoying roaring sales.

    Look at our banks; they actually CHARGE you to deposit your cash even for a savings account. Then enter Ecocash and all the banks are screaming murder asking the govt to ban the cheap facility of availing cash to the poor.

  15. these zanu folks shld step aside nd let brains run the country.we r tired of everything being run by the fist

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