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Bulawayo on the rebound

by Staff reporter
15 Oct 2017 at 12:19hrs | Views
After decades of progressive decay, signs of recovery have started to show for Bulawayo's beleaguered industry as factories where birds had come to roost begin to rise out of their slumber.

The re-awakening of the industrial hub may not be on a massive scale and indeed might not be very apparent, but the movement is there and several hundred people have been employed in Bulawayo's industries in the past few months.

A recent survey conducted by Industry and Commerce ministry in conjunction with the Confederation of Zimbabwe Industries (CZI), established that a number of companies in the country's second largest city have started showing signs of recovery while others have already started servicing export markets.

Once the country's industrial hub, Bulawayo has suffered chronic de-industrialisation effects over the past two decades with over 100 firms — mostly in the manufacturing, textile and clothing sectors— closing down and leaving thousands of workers jobless.

Some of the firms that closed shop include David Whitehead Limited, Textile Mills, Belmore Manufacturers, True Value, Label Fashion, Suntosha Leisure Wear, Lancaster, Harren Manufacturing, Belmor Fashions, Cinderella, Rusglen Fashions, Ascot Clothing, to name a few.  

Other former giants like National Blankets and Security Mills are under judicial management, while the Cold Storage Company and National Railways of Zimbabwe are operating way below capacity.

However, the tables have begun to turn and signs of recovery have been noted in some of the industries.

Companies such as Treger Group of Companies, United Refineries, Meprin Founders, Datlabs, Blue Ribbon, Arenel Biscuits and General Beltings, among others have started showing signs of recovery.

A drive around Kelvin, Belmont and Thorngroove industrial areas also confirmed this refreshing scenario.

Addressing delegates at a pre-budget dialogue in Bulawayo last week, CZI Matabeleland Chapter president, Joseph Gunda said several surveys conducted with the Industry ministry pointed to the fact that the city was slowly crawling out of the woods.

There were indications, he said, that some key sectors were making positive strides in servicing both the local and export markets.

"Several companies have of late shown renewed interest in the city and the existing firms are increasing their capacity utilisation while at the same time establishing new branches," Gunda said.

"Meanwhile, those that had closed shop are re-opening, with others erecting new plants."

Gunda said Monarch Steel, a subsidiary of Treger Group of Companies, had recorded a 167% increase in export volumes since last year, while United Refineries Limited (URL) had diversified its product portfolio.

URL has also pushed capacity utilisation to over 75% from the 50% it had sunk to before 2009, according to CEO Busisa Moyo.
Blue Ribbon Foods re-opened at the beginning of the year and has created employment in the city, while Datlabs has pushed its capacity utilisation to over 78%, Gunda said.

"There is also Meprin Founders and there is Arenel Biscuits which has diversified into manufacturing beverages," Gunda said.
"There is Bakers' Inn who have been re-tooling and getting new equipment to increase their capacity utilisation and improving the quality of bread."

Some firms which had been in the hole include Proton Bread, Ref Air, PPC Zimbabwe, Rubber Products Manufacturers, Bottom Armature Winding, Archer Clothing Manufacturers and Shepco Group which acquired BMA Fasteners recently.

PPC Zimbabwe have done a number of initiatives in Bulawayo involving installing bulk handling systems and palletisers, according to managing director, Kelibone Masiyane.

Rubber Products Manufacturers recently resumed operations and exports after having shut down in 2013 due to a huge debt and shortage of working capital, among other problems.

Archer Clothing Manufacturers have since the beginning of the year employed an additional 600 workers, buoyed by improved production and exports.

Gunda said General Beltings had capacity utilisation going up from 20% to 41%.

"We also have regional companies like Motovac that have distribution networks in Bulawayo," he said.

"There is anticipation from FAW, a leading Chinese-headquartered automotive manufacturing company that has highlighted that it will soon set up a motor mobile assembly plant in Bulawayo, a development that will certainly boost efforts to revive the city's industrial sector."

Gunda said there was another company with operations in South Africa that had agreed in principle with Bulawayo City Council to set up a vehicle assembling plant in the city.

These positive developments come at a time Bulawayo has been designated an industrial Special Economic Zone (SEZ) for leather and textile.

But industry and commerce executives in the city have called on the government to declare the entire city an industrial SEZ as opposed to adopting a sectoral approach.

Despite these positive developments, shortage of foreign currency to import required raw materials remains the biggest threat to these resurgent companies, Gunda said.

"Yes, there are positives but there are a lot of challenges. One of the key challenges we have as industry is shortage of foreign currency to import key raw materials and machinery spares," he said.

"This to us is simply the biggest threat to business revival in Bulawayo and the country at large."

Zimbabwe is battling foreign currency shortages, with manufacturers struggling to make foreign payments due to depleted nostro reserves.

The central bank has arranged a $600 million facility from Afreximbank to unlock the foreign payments gridlock.

Local businessman and industrialist, Delma Lupepe said government should in the outlook avail a special funding package for industries to support companies in Bulawayo.

"We need to zero down and focus on getting government to set up a fund to re-equip industries and revive firms," he said.
"That fund should be able to bail out companies so that they produce and export more."

With affordable loans, Lupepe said Bulawayo industries would be able to procure modern machinery that would cut production costs and enhance competitiveness to ultimately weed out imports.

The city's industries need an estimated $500 million in the short term to recapitalise, according to economic analysts.

Source - the standard

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