THE furniture-manufacturing sector is operating at 30% capacity due to delays by government in coming up with legislation reducing duty on raw materials, the sector’s umbrella body has said.
BY TATIRA ZWINOIRA
Furniture Manufacturers’ Association chairman, Phanuel Vheriwa yesterday told the Parliamentary Portfolio Committee on Industry and Commerce that once the reduction was effected, the move would boost the industry by up to 60%.
“I think the statutory instrument is important because it would really have an impact on pricing. Without a doubt, we will see a 30% increase [in production] to about 60%. Once the price goes down production will go up,” he said.
“There is hardly anything that has been imported that is not available locally, I would still need to see it and even those that have imported have burnt their fingers and are actually asking eventually to buy locally and that is growing by the day. Each day, people are starting to shun the Chinese products.”
In his mid-term Fiscal Policy review, Finance minister Patrick Chinamasa announced a 40% reduction in duty on raw materials effective September 1. A statutory instrument to give rise to the reduction is yet to be issued.
A tour of the industry was done to assess the performance of the sector.
The committee toured Teecherz Furnishers Zimbabwe and Universal Furniture Manufacturers.
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The proposed reduction in duty would mainly be on fabrics and chemicals used in the manufacturing of furniture.
In recent months, the rise of Chinese products on the local market has pushed out local manufacturers resulting in the dwindling of the workforce to 1 600 from a peak of 16 000.
Committee chairman Edmund Mhere told the furniture manufacturers that his committee would help the sector, but “government has its own challenges”.
“The budget is coming up and we would be very happy to get contributions on what you [furniture manufacturers] want government to do in order to help you,” Mhere said.
The Furniture Manufacturers’ Association has 32 members and seeks to retool the industry in order to increase capacity.
Leather, one of the main materials used in the industry, is expensive to buy locally, with most manufacturers opting to order it from South Africa or Italy.
Vheriwa said the industry was also affected by the lack of financing to help the local manufacturers. He said financing was coming at expensive rates of between 12% and 17%.
Findings from the tour, as well as recommendations from the manufacturers, are to be submitted to the committee by next Tuesday to be included in the National Budget at the end of this month.
