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Polyfoil Zimbabwe to invest US$1m in equipment

by Staff reporter
07 Feb 2020 at 05:36hrs | Views
Packaging material manufacturer and supplier, Polyfoil Zimbabwe plans to invest US$1 million in plant and equipment at its factory in Bulawayo over the next three years to improve on operational competitiveness.

The Bulawayo-headquartered company which emerged from the woods in 2018 having been placed under judicial management in 2013 is operating at 48 percent capacity due to depressed demand.

In an interview after a tour of the firm by Industry and Commerce Deputy Minister Raj Modi who was accompanied by Bulawayo Provincial Minister Judith Ncube yesterday, Polyfoil Zimbabwe managing director, Mr Mudiwa Mhazo said:

"Our wish-list (for retooling) goes up to US$1 million over the next three years as there are a number of machinery that we want and we would want to do it (retooling) in phases."

The delegation that also comprised officials from the Ministry of Industry and Commerce, and the Federation of Master of Printers of Zimbabwe chairman Mr Benison Ntini, toured Treger Plastics and Directory Publishers.  

Mr Mhazo said they had been motivated to invest in new technology to boost his organisation's competitiveness which was also eyeing exports in the region.  

Polyfoil Zimbabwe employs 51 people and before going into judicial management, the packaging material producer employed more than 200 workers.

"For us to be able to compete not just in Zimbabwe, but also regionally, we'll need to invest in a more sophisticated printer and on those we are looking at half-a-million dollars or more. So, our wish list is about US$1 million over the next three years," he said.

Since coming out of judicial management, Polyfoil Zimbabwe has spent over US$300 000 investing in modern plant and equipment.

"In 2018, we bought a new compressor valued at about US$35 000, a new printer worth US$230 000 last year and we have invested in a bag-making machine valued at US$45 000.

"We could have bought a bigger one but we are restricted by foreign currency requirements," said Mr Mhazo.

After the tour, he told the visiting delegation that Polyfoil Zimbabwe has also not been spared from the macro-economic challenges companies were reeling under.

"On our capacity utilisation, because we are aligned to businesses, we have been left out in terms of depressed demand; the markets are depressed and we have been affected.

"We have limited access to foreign currency and this has affected us in terms of raw material acquisition; 90 percent of our raw materials are imported and that presents a challenge.

"We also require funding to buy the necessary equipment that we need to remain competitive.

"As a company we believe that funding (foreign currency) should be made available for acquisition of raw materials and not necessarily finished products because we have got the capacity to make those products locally," he said.

Since the introduction of the interbank foreign exchange market, Mr Mhazo said his organisation has accessed US$20 000 through the facility.  

The monetary authorities introduced the interbank market in February last year to tame the foreign currency gridlock arising from widening parallel market activities. However, the private sector has recently raised concerns that they were finding it difficult to access the much-needed foreign currency to facilitate the importation of critical raw materials.

Mr Mhazo said production costs at Polyfoil Zimbabwe had also been exacerbated by poor electricity supply.  

"In terms of our cost structure electricity contributes about 7 percent but that has now almost trebled to 21 percent," he said. "We also have a challenge of carrier bags that are being smuggled into the country and this also causes problems on us because we also have EMA (Environmental Management Agency) wanting to ban plastics because most people are littering those plastics.

"But it's not the packaging that we are manufacturing, it's packaging imported. There is a ban on use of plastic bags so we are still working with EMA on how best to go about it," he said.

Responding to the concern on the banning of plastic use in the country by EMA, Mr Ntini said the banning of use of plastic is common worldwide. "But when we researched, developed countries are still producing plastic.  

"The United States, is a big user of plastics . . . they are actually going into oil to produce more plastics, Japan is another example.  

"So, in these arguments you aren't alone, there won't be a ban on plastic use if we can assure EMA that we are working on how do we deal with plastics," he said

Source - chroncile