Clay Products seeks to have some of its products removed from OGIL

by Sunday News Online | Sunday, Jul 16, 2017 | 683 views

CLAY

Dumisani Nsingo, Senior Business Reporter
THE country’s leading manufacturer of refractory bricks, Clay Products Limited has applied to the Ministry of Industry and Commerce to have some of its products removed from the Open General Import Licence as it bids to keep its business afloat in the wake of cheap imports, which have flooded the local market.

Clay Products human resources manager Mr Paul Karanda said the introduction of Statutory Instrument 64 of 2016 Control of Goods (Open General Import License) had played a significant part in improving productivity in industry thus the reason the company has approached the ministry to restrict imports of some of the products it had the capacity to manufacture.

The company is seeking to have importation of normal duty and high duty refractory bricks as well as castable material.

“We have been in contact with the ministry. They have asked us to put our case. We have made those submissions and we now await leads to whether it would directly come to us and it would be included it in the following instruments or not. Be that as it may, I feel that as long as the initiatives are being undertaken to prop up industry as it were, we will benefit,” said Mr Karanda.

He said the company’s capacity utilisation was hovering around 20 percent largely due to a shrinking demand of their products on the local market.

He said the company was not very active on the export market as it was only dealing with a few clients in Zambia and Botswana.

“We don’t have much in terms of exports to talk about serve for one or two customers in the region, here and there in Zambia and in Botswana,” said Mr Karanda.

The company’s managing director Mr Killian Mudzimu said hopes of turning around their business fortunes lie in the revival of Ziscosteel.

“Clay Products was founded on refractories, that was the main business and refractories was Zisco. Zisco renumerated a whole lot of the downstream industries that were associated with it and our plea to the Minister (Mike Bimha when he visited us two years ago) was to give impetus to the Zisco story because steel industry in any country is a strategic industry. Things did not go as we hoped and expected . . . ,” said Mr Mudzimu.

He said the company’s major client over the years has been the Zimbabwe Power Company (ZPC).

“We continue to do business with ZPC through their thermal power stations. We do business with refractory bricks and monolithic refractories. The main challenge with them (ZPC) is the length of time it takes for the products to be paid for . . . but be that as it may it’s also a strategic business and we continue to support it even with the slow payment, we do the best we can to keep it going,” said Mr Mudzimu.

The company also draws business from food processors, timber and the agricultural sector’s tobacco industry.

“We benefit from the tobacco business and also with the good season that we have had we look forward to doing good business with them. The foundries have been affected partly because of the Zisco story and some of it has been the general economic situation but we continue to plug in where we can,” said Mr Mudzimu.

He further said the company would continue to explore for export markets in order to take advantage of the Reserve Bank of Zimbabwe’s five percent export incentive. The central bank introduced the performance-related export bonus scheme of up to five percent to enhance productivity and promote exports with the overall aim of lubricating the economy.

Clay Product’s mainstay remains its refractory business as it was forced to cease earthenware and sanitary ware productions.

It had to scale down the production of its earthenware products due to the advent of Polyvinyl Chloride (PVC) products.

“Earthenware is where we were hard hit by PVC where PVC came in to replace some of the areas where earthenware was being used and the market was talking about advantage of lightness and the cost was also lower,” said Mr Mudzimu.

He also said the company was forced to decommission its sanitary ware plant a few years ago due to lack of foreign currents to procure modern machinery as well as rampant electricity load shedding which was impacting negatively on production.

The company sources its clay from Lupane’s Gwayi area and Chiredzi and coal from Hwange. It also imports some of its raw materials from South Africa. At its peak the company used to employ 425 workers but currently it has a workforce of about 100.
@DNsingo

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