News / Regional
Bulawayo firms pay extra
14 Apr 2016 at 06:27hrs | Views
MANUFACTURERS in Bulawayo are facing additional costs when importing raw materials due to the long route they take to get inputs to factories.
Local firms are often forced to consolidate cargo with companies in Harare to share costs.
Datlabs technical director Victor Basopo said 80 percent of the inputs the company uses are imported but due to the fact that there were few factories in Bulawayo, the consignments often go through Harare.
"When we order materials, we use one truck to transport the goods and they're delivered to the door. But if the consignment isn't big enough and can't fill a truck, it's loaded with stuff going to Harare. The clearance is then done in Harare and our goods are transported to Bulawayo," he said. Basopo said this becomes an additional cost to manufacturers in Bulawayo and that was also resulting in delays.
"At our peak, we used to employ 500 people but at the moment we've about 160 workers including the marketing team in Harare. We're facing competition from finished drugs that are coming into the country duty free while raw materials have a duty levied on them. We also need to automate and retool our factories," said Basopo.
In a separate interview, Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland chapter president Crispen Mugova said the few companies still operating in the city were sometimes failing to order in bulk.
He said this meant that companies had to consolidate with other buyers and in the end accrue additional costs as carriage inwards becomes costly.
"This also applies to air cargo as there's no cargo flight to Bulawayo so everything goes through Harare which then makes the cost of bringing in raw materials costly for manufacturers," said Mugova. Most of the industries in Bulawayo rely on imports for raw materials like the leather industry which imports material chemicals.
Bulawayo was for years Zimbabwe's industrial hub and boasted a number of large manufacturing and engineering companies. However, over the past years, more than 100 companies have closed shop or relocated from the city leaving thousands of workers jobless.
Local firms are often forced to consolidate cargo with companies in Harare to share costs.
Datlabs technical director Victor Basopo said 80 percent of the inputs the company uses are imported but due to the fact that there were few factories in Bulawayo, the consignments often go through Harare.
"When we order materials, we use one truck to transport the goods and they're delivered to the door. But if the consignment isn't big enough and can't fill a truck, it's loaded with stuff going to Harare. The clearance is then done in Harare and our goods are transported to Bulawayo," he said. Basopo said this becomes an additional cost to manufacturers in Bulawayo and that was also resulting in delays.
"At our peak, we used to employ 500 people but at the moment we've about 160 workers including the marketing team in Harare. We're facing competition from finished drugs that are coming into the country duty free while raw materials have a duty levied on them. We also need to automate and retool our factories," said Basopo.
In a separate interview, Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland chapter president Crispen Mugova said the few companies still operating in the city were sometimes failing to order in bulk.
He said this meant that companies had to consolidate with other buyers and in the end accrue additional costs as carriage inwards becomes costly.
"This also applies to air cargo as there's no cargo flight to Bulawayo so everything goes through Harare which then makes the cost of bringing in raw materials costly for manufacturers," said Mugova. Most of the industries in Bulawayo rely on imports for raw materials like the leather industry which imports material chemicals.
Bulawayo was for years Zimbabwe's industrial hub and boasted a number of large manufacturing and engineering companies. However, over the past years, more than 100 companies have closed shop or relocated from the city leaving thousands of workers jobless.
Source - chronicle
