The Sunday News
Judith Phiri, Business Reporter
BULAWAYO leather company, Zambezi Tanners is set to increase capacity utilisation to about 100 percent next year after acquiring new machinery to the tune of 540 000 euros as it moves to scale up its production.
Situated in the Kelvin industrial area, Zambezi Tanners has emerged as one of the most successful Bulawayo business stories, with its vibrant leather tanning and leather products manufacturing.
Zambezi Tanners general manager Mr Arnold Britten said they were set to commission a new plant early next year to increase their capacity utilisation.
“We have invested 540 000 euros which is about US$650 000 in the machines. After commissioning the plant our capacity utilisation will increase to about 100 percent, at the moment our capacity was very low.
“With this machine we will be able to produce better quality and double the volume that we were previously producing,” said Mr Britten in a sideline interview.
This was after the tour of the company by the Minister of State for Presidential Affairs responsible for monitoring and implementation of Government programmes, Dr Joram Gumbo who was in the company of Bulawayo Provincial Affairs and Devolution Minister, Judith Ncube.
The company will commission the new plant following Government’s support to scale up production and acquire new equipment under the 100-Day Cycle Programme.
Mr Britten said the company exports 90 percent of its products which earns them and the country foreign currency.
He said to acquire the machinery, Zambezi Tanners got a loan from BancABC which has been very supportive to their expansion programme.
Mr Britten added: “Also with the response from Reserve Bank of Zimbabwe (RBZ) they allowed us to purchase our currency from the auction system and from the money we got there we were able to buy the machinery.
Government has really been supportive as well as the Ministry of Industry and Commerce that made a special application on our behalf to exempt us from duties and VAT on the machines. So, this again has also been great help to us because the cost of duty and VAT on the machines would have been a lot for our business.”
He said Zambezi Tanners level of capacity utilisation has increased from an average monthly output of 90 tonnes for the past three years to the current capacity of over 150 tonnes per month.
Among the challenges the company is facing, Mr Britten said the revenue collection authority, Zimbabwe Revenue Authority (Zimra) owed them money which was a setback to their business.
“We have a challenge actually we know that cash flow is difficult for everyone just like we are a business, Zimra is also a business and they also have cash flow challenges but it doesn’t help us if we do not get our refunds.
“As you all know you have got to pay Zimra for your VAT that you charge, but at times when you are net off there are funds that are owed to you by Zimra but those funds coming back to us are taking an exceedingly long time, which then affects our business,” he said.
He bemoaned the 40 percent retention stating that it was affecting them to continue funding their operations.
“As you can see, we are trying to increase our capacity, we import chemicals that are not manufactured in Zimbabwe, hence, there is a need for foreign currency.
If we do not have that currency for us to buy the extra chemical to put into our production, we are not able to increase our capacity.”
Mr Britten said they were appealing to be given at least 12 months grace period on retention to allow them to retain 100 percent of the foreign currency so that they could reinvest in their business so that they could buy the imports they need.
The 100-Day Target Based Programme was a deliberate attempt by Government to address anomalies associated with project implementation. In two days, Dr Gumbo toured Zambezi Tanners, Zimbabwe Grain Bag and National Blankets Limited.
He said: “The development initiatives taking place at the companies we have toured, are clear testimony that Bulawayo is regaining its status as the industrial hub of the country.
I would like to assure you that my office is always ready to render assistance whenever you encounter challenges in the implementation of projects.”
