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Imports push fridge makers to the edge

by Staff reporter
19 Jan 2019 at 10:46hrs | Views
THE local refrigerator-manufacturing industry needs protection from imports as it is now cheaper to import than manufacture, a leading player, Capri, has said.

The fridge maker, which ceased operations in November last year said it had lost local market share due to foreign exchange valuation concerns stemming from a severe shortage of foreign currency and government's claims that the bond note is at par with the US dollar.

A number of manufacturers have halted operations after failing to access the greenback due to higher rates on the parallel market and its unavailability on the formal market.

Capri managing director Gary Watson last week told a Confederation of Zimbabwe Retailers (CZR) breakfast meeting that the disparity between the bond note and the US dollar was making the Zimbabwean market very expensive.

He said there was an urgent need to institute a raft of reforms to curtail this. While the currency issue was equally important, he said policy on the ease of doing business was still of critical importance as it was affecting the smooth running of operations in the country.

Watson said prior to the company's shutdown, exports had been on a growth path aided by government support through export incentives.

"Of late, everything has actually been to a disadvantage to us as manufacturers. If somebody imports a fridge from South Africa, it lands cheaper here. So the effect of duty protection for us as an industry has collapsed and now there is more competition from imports and shortage of the dollar," he said.

Watson also said the foreign currency shortage crisis has left the company in a huge debt which it is failing to service as efforts to access forex have not been fruitful.
He revealed that the company continues paying its more than 200 employees despite sending them home. Watson said Capri had also applied for forex from the central bank.

Source - the independent

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