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Chiwenga flies into storm

by Staff reporter
09 Apr 2021 at 06:34hrs | Views
VICE-PRESIDENT Constantino Chiwenga is today expected to launch the Zimbabwe Leather Sector Strategy (ZLSS) 2021-30 in Bulawayo.

The launch comes at a time when the Affirmative Action Group (AAG) has crossed swords with the Hides and Skins Merchants Association of Zimbabwe (HSMAZ) over the future of the industry in the face of COVID-19.

The ZLSS 2021-30, approved by Cabinet in November last year, seeks to push for increased investments while maximising on valueaddition and beneficiation to promote export-led industrialisation.

The strategy, to be launched by Chiwenga, succeeds the 2012-17 ZLSS.

HSMAZ is, however, at loggerheads with AAG over the future of the industry after the former requested the suspension of hides export tax to relieve the sector that has reportedly taken a beating from COVID-19 and competition from artificial leather products.

According to HSMAZ, COVID-19 has resulted in huge amount of resources being channelled towards food and health at the expense of luxurious leather products, resulting in the scaling down of operations at most tanneries.

With shrinking demand in small hides, hides and skins merchants including farmers and some abattoirs have been accumulating stocks of unwanted hides and skins, HSMAZ said, arguing that "these stocks come with the high costs as the main ingredient for preservation, coarse salt is imported".

As a way forward, HSMAZ appealed to government to allow stocks to be exported tax-free to gelatin factories, a request AAG dismissed as criminal, arguing it amounted to exporting jobs.

"Old stock in the absence of local gelatin manufacturing companies, HSMAZ, proposes that all old stock currently in warehouses and storages across the country be exported tax-free to gelatin factories in South Africa. HSMAZ (also) proposes that all unwanted light and reject hides be exported tax-free," HSMAZ said in a position paper which attracted AAG's fury.

AAG president Denzel Sita said: "Government must not allow the export of raw leather, instead must provide incentives to local firms to process through duty-free imports of plant machinery and provide loans to already established players to import the required equipment for processing and producing various goods.

"We can't be preaching value-addition in the morning and practising the opposite in the afternoon."

In an earlier tweet, AAG posted: "We cannot allow this criminal activity of exporting jobs to other countries under the guise of production capacity now with the Africa Free Trade Area. Let's build our industry capacity."

HSMAZ is the main link between the livestock farmers/abattoirs and the tanneries.

ZLSS 2021-30 refers to the Zimbabwe leather value chain as well structured starting from livestock farmers, abattoirs, hides and skins merchants/traders/suppliers, tanneries, manufactures and retailers.

Each player along the chain is expected to derive value for the strategy to pay dividends.

Source - newsday