News / National
Zimbabwe - Iran tractor deal facing challenges
31 Oct 2013 at 12:25hrs | Views
Plans to expand Motira tractors, a joint venture business between Iran and Zimbabwe, have stalled due to challenges being incurred in shipping the knocked down kits needed to boost production at the assembly plant.
Motira Private Limited is a joint venture between the Industrial Development Corporation of Zimbabwe, the Iran Foreign Investment Corporation and Iran Tractor Manufacturing Company ITMCO that was launched in 2010. The Iranian government provided $5 million in capital to kick-start the project.
But IDC chief executive officer Michael Ndudzo said despite the availability of capital the project was failing to expand due to failure to access new stocks of the tractors.
He said plans to establish a foundry to manufacture some of the tractor components locally had also not been successful. Economic sanctions that Western countries imposed had also stifled growth of the business as some spare parts destined for Zimbabwe were in some cases intercepted.
"The first phase of the project was to assemble the ITMCO tractor which was a Massey Ferguson brand. We were going to assemble it first and then we were going to try and distribute it in the region and once we reached a population of 500 tractors we were then going to develop a foundry so that we could start making some of the components locally using locally available materials but again because of the sanctions that project did not start," he said.
"First it was very difficult from the logistical side to get supplies of the tractors to Zimbabwe. When we order new ones after disposing of the other old stock, it takes us twelve months because of the logistical problems and sanctions and in some cases its actual interception of consignments."
Ndudzo said the business was also suffering from the liquidity challenges the country was facing.
"We are not able to then meet all the requirements of our customers because at times we do not have stocks of the tractors or when the stocks are available our customers do not have the finance because of the liquidity position in the country," he said.
Motira specialises in assembling tractors from completely knocked down kits imported from Iran.
Apart from assembling, producing and selling tractors Motira also offers after-sales service support for the whole range of tractors and implements of the same brand.
The Motira plant has the potential to produce 23 tractors per day or 7 000 tractors per annum when operating at full capacity.
Motira Private Limited is a joint venture between the Industrial Development Corporation of Zimbabwe, the Iran Foreign Investment Corporation and Iran Tractor Manufacturing Company ITMCO that was launched in 2010. The Iranian government provided $5 million in capital to kick-start the project.
But IDC chief executive officer Michael Ndudzo said despite the availability of capital the project was failing to expand due to failure to access new stocks of the tractors.
He said plans to establish a foundry to manufacture some of the tractor components locally had also not been successful. Economic sanctions that Western countries imposed had also stifled growth of the business as some spare parts destined for Zimbabwe were in some cases intercepted.
"The first phase of the project was to assemble the ITMCO tractor which was a Massey Ferguson brand. We were going to assemble it first and then we were going to try and distribute it in the region and once we reached a population of 500 tractors we were then going to develop a foundry so that we could start making some of the components locally using locally available materials but again because of the sanctions that project did not start," he said.
"First it was very difficult from the logistical side to get supplies of the tractors to Zimbabwe. When we order new ones after disposing of the other old stock, it takes us twelve months because of the logistical problems and sanctions and in some cases its actual interception of consignments."
Ndudzo said the business was also suffering from the liquidity challenges the country was facing.
"We are not able to then meet all the requirements of our customers because at times we do not have stocks of the tractors or when the stocks are available our customers do not have the finance because of the liquidity position in the country," he said.
Motira specialises in assembling tractors from completely knocked down kits imported from Iran.
Apart from assembling, producing and selling tractors Motira also offers after-sales service support for the whole range of tractors and implements of the same brand.
The Motira plant has the potential to produce 23 tractors per day or 7 000 tractors per annum when operating at full capacity.
Source - New Ziana
