Capacity utilisation reaches 39%

The manufacturing sector has recorded a 1,9 percentage increase in capacity utilisation to 39% driven by activities in the beverages and construction sectors, the Confederation of Zimbabwe Industries(CZI) has said.

BY VICTORIA MTOMBA

In the same period in 2014, capacity utilisation was 37,1%.

In its submissions to the Ministry of Finance as input into the mid-term fiscal policy review, CZI said the manufacturing sector continues to struggle but in terms of turnover and staffing levels an improvement has been recorded on year to date.

Turnover increased by 9,95% during the period year to date while staffing levels were up 3,4% for the period under review.

“The same applies for the capacity utilisation which has improved by 1,9% from last year’s period. The beverages sector has recorded an increase in year-to-date capacity utilisation compared to the same period last year. The decline in prices could have pushed up the volumes. Processors’ turnover increased by 16% compared to the same period last year,” CZI said.

CZI said the construction industry recorded an increase in business which is attributed to an increase in the number of government bankable projects.

“Notwithstanding the above positives, there were also some sectors which showed a decline in performance. One of the low performances was recorded in industrial chemicals sector which declined by 9,6%.

“Fertiliser manufacturers have experienced a low uptake of its products during the 2014-2015 season due to lack of purchasing power from farmers.”

The plastic sector declined by 2% with over 30% of the companies operating below 20% capacity utilisation. CZI said the plastic sector had 10 companies that were closed in 2014 and eight which are under judicial management.

“The majority of those companies that are currently operating in the plastics sector are either on short notice or have applied for variation of working conditions as a survival strategy,” CZI said.

Capacity utilisation for the manufacturing sector took off in 2009 at around 10% and it rose to 57,2% in 2011 and since then it has been on the downward trend.

CZI said the capacity utilisation for beef was 40% of pre-2000 slaughters, dairy 25% and poultry at 100%.

The livestock and meat sector witnessed high disease incidents due to breakdown in public dipping and vaccination programmes, power cuts and high costs of feed inputs.

The sector is facing challenges due to competition from cheap imports, unavailability of funds for retooling, low consumer demand and high production costs. CZI said company closures and retrenchments were the order of the day and that are mostly affected are motor industry, timber, cement, engineering, agriculture, security, mining and furniture.CZI said specific sectors that have received interventions such as temporary tariffs and import licenses which are regulated together with industrial players have started to yield positive results.

The sectors include oil expressers, poultry, dairy, clothing and tanneries.

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