Business / Companies
Manufacturing sector's capacity utilisation for 2016 stable: CZI
22 Jul 2016 at 05:45hrs | Views
THE manufacturing sector's capacity utilisation for 2016 is expected to remain stable on last year's levels or marginally increase on the back of policy interventions introduced, Confederation of Zimbabwe Industries (CZI) vice president Sifelani Jabangwe has said.
According to the CZI 2015 manufacturing sector report, capacity utilisation dropped 2,2 percentage points to 34 percent under a tight operating environment characterised by erratic utility supplies, cash constraints and obsolete equipment among others.
This year, the economy has been marred by liquidity constraints, weakening of the South African rand against the greenback, imports and deflationary pressures which negatively affected local industry.
Jabangwe however hinted, the 2016 manufacturing sector's capacity was expected to remain stable at current levels or inch up marginally.
He said while industry has faced a myriad of challenges in the year, there was still hope for revival on the back of policy measures introduced by Government to promote local consumption.
He cited the Statutory Instrument 64 recently introduced to ban certain imports that can be produced locally as one of the positive moves
towards industry revival.
"We expect this to work in the industry's favour. This will divert demand from South African products towards locally manufactured goods," he said in an interview with The Herald Business.
"There is a strong likelihood capacity will be stable and can even improve marginally as industry begins to see implementation and the benefits of the support measures introduced by Government.
"But the devaluation of the rand alone was a big problem for local industry which made our products expensive," he said.
South Africa is Zimbabwe's biggest trade partner. The weakening of its currency therefore and those surrounding Zimbabwe risks making local industry uncompetitive as it becomes an expensive export destination.
Meanwhile, the CZI will next week hold its annual congress in Bulawayo in which captains of industry are expected to strategise on improving production and competitiveness which has declined over the past decade.
The congress will run under the theme "Strengthening value chains for sustainable industrialisation and economic development."
Jabangwe said this year's congress, which runs from 27 to 29 July will buttress factors that hinge on the growth of value chains, mechanisation as a catalyst for growth and cost competitiveness.
"The main thing we are looking at is consolidation of value chains, stabilising industry and import substitution. We are also hoping to come up with a plan on improving industry together with mining linkages," he said.
The CZI annual congress is a key event on the business calendar and the economy as it helps shape the future of industry and informs Government on key recommendations to boost local industry and the economy.
It is however the implementation of programmes to address industry problems that is worrisome as some resolutions keep recurring at each congress.
Jabangwe however, expressed optimism on this year's congress arguing there was strong will from both industry and Government to improve the economy by supporting the local manufacturing sector.
"A lot of the polices have come out of our congresses. Government has come up with support measures informed by our congress resolutions," he said.
According to the CZI 2015 manufacturing sector report, capacity utilisation dropped 2,2 percentage points to 34 percent under a tight operating environment characterised by erratic utility supplies, cash constraints and obsolete equipment among others.
This year, the economy has been marred by liquidity constraints, weakening of the South African rand against the greenback, imports and deflationary pressures which negatively affected local industry.
Jabangwe however hinted, the 2016 manufacturing sector's capacity was expected to remain stable at current levels or inch up marginally.
He said while industry has faced a myriad of challenges in the year, there was still hope for revival on the back of policy measures introduced by Government to promote local consumption.
He cited the Statutory Instrument 64 recently introduced to ban certain imports that can be produced locally as one of the positive moves
towards industry revival.
"We expect this to work in the industry's favour. This will divert demand from South African products towards locally manufactured goods," he said in an interview with The Herald Business.
"There is a strong likelihood capacity will be stable and can even improve marginally as industry begins to see implementation and the benefits of the support measures introduced by Government.
"But the devaluation of the rand alone was a big problem for local industry which made our products expensive," he said.
South Africa is Zimbabwe's biggest trade partner. The weakening of its currency therefore and those surrounding Zimbabwe risks making local industry uncompetitive as it becomes an expensive export destination.
Meanwhile, the CZI will next week hold its annual congress in Bulawayo in which captains of industry are expected to strategise on improving production and competitiveness which has declined over the past decade.
The congress will run under the theme "Strengthening value chains for sustainable industrialisation and economic development."
Jabangwe said this year's congress, which runs from 27 to 29 July will buttress factors that hinge on the growth of value chains, mechanisation as a catalyst for growth and cost competitiveness.
"The main thing we are looking at is consolidation of value chains, stabilising industry and import substitution. We are also hoping to come up with a plan on improving industry together with mining linkages," he said.
The CZI annual congress is a key event on the business calendar and the economy as it helps shape the future of industry and informs Government on key recommendations to boost local industry and the economy.
It is however the implementation of programmes to address industry problems that is worrisome as some resolutions keep recurring at each congress.
Jabangwe however, expressed optimism on this year's congress arguing there was strong will from both industry and Government to improve the economy by supporting the local manufacturing sector.
"A lot of the polices have come out of our congresses. Government has come up with support measures informed by our congress resolutions," he said.
Source - Herald
