The Sunday News
Judith Phiri, Business Reporter
RETOOLING for businesses has been identified as key in improving capacity utilisation, creating continuity and normalcy in 2022.
In the past two years, most companies have failed to retool as the Covid-19 pandemic disrupted the global economy, wreaking havoc in some sectors and providing unforeseen windfalls to others.
In an interview, Confederation of Zimbabwe Industries (CZI) Matabeleland chapter president Mr Raymond Shoniwa encouraged businesses to adjust to the existence of Covid-19 and retool so as to remain in existence.
He said businesses’ ability to adapt to uncertainties puts them in a stronger market position and sets them apart from their peers.
“Businesses have to adjust to the existence of Covid-19 to avoid incurring additional costs. As we enter 2022 the pandemic is still there, hence, one of the solutions for this year, so as to remain in existence, is to embark on a retooling drive and find possible solutions to counter incurring additional costs,” said Mr Shoniwa.
He said although it was difficult for factories to operate from home like other businesses, there was a need for creativity as they adhere to the Covid-19 guidelines and measures.
“Once businesses are able to access foreign currency it can make it easier for them to retool. We are also hoping for stability in the exchange rate as currently there is a big margin between the bank rate, and the black-market rate,” he said.
Bulawayo Chamber of Small and Medium Enterprises (SMEs) chairperson Mr Coustin Ngwenya said lack of access to foreign currency was presenting challenges to the SMEs’ retooling drive. He said there was a need for financial linkages as SMEs had to be financed to expand their businesses.
“We are working on linking them to banks, micro-finance institutions and donors. For credit schemes, we will try to engage financial institutions to create loans for SMEs, especially long-term. We also need to finance short-term activities like order-financing,” said Mr Ngwenya.
Zimbabwe Institute of Foundries (ZIF) chief operations officer Mr Dosman Mangisi said shortage of raw materials and high production costs also affected the sector to retool.
“This sector used to produce 60 percent of products in the mining sector, 40 percent in agriculture and 40 percent in construction, 30 percent in transport and 20 percent in water and irrigation among others.
“Once challenges in the sector have been addressed it could double products being manufactured for the different sectors so that the country reaches a proper stage of import substitution,” said Mr Mangisi.
He said when most of the products — machinery and equipment — are manufactured locally, there will be less demand of foreign currency and this would strengthen the Zimbabwean dollar on the market.
Mr Mangisi said ban of scrap metal export was key for the multi-million dollar industry to be resuscitated with expectations that it will increase capacity utilisation to 80 percent by the end of the year.
“The metal casting industry was one of the biggest employers in the country but now it employs a few people. As ZIF we have a number of lined up events, which seek to rejuvenate the foundry sector in the country.
“Its resuscitation will greatly impact on the economic growth of the country. Government’s commitment to promoting the operations of companies in the foundry sector has started to bear fruits as seen by the ban of chrome ore exports.”
Zimbabwe has 55 metal foundries including steel plants that are operational, with the other 30 being non-operational due to shortage of scrap metal and the unavailability of raw materials.
