Firm eyes $1m machinery upgrade

Business Reporter
One of the country’s leading manufacturer and supplier of stationery products, Rank Zimbabwe, plans to inject approximately $1 million into a new machinery that will among other things allow the company to double its capacity for the manufacture of exercise books, a company official said.

In a presentation to Primary and Secondary Education Minister Paul Mavhima and Reserve Bank of Zimbabwe officials yesterday, Rank Zimbabwe operations director Amish Naik, said investing in a new plant will allow the company to meet local market requirements as well as export into the region.

Mr Naik said once in place, the new machinery will result in foreign currency savings of more than $3 million per annum, while national treasury will get approximately $300 000 through VAT payments alone.

With the new machinery, efficiency will increase by 200 percent as it is made up of the latest printing technology.

In terms of exports, Rank’s target is to grow its earnings to $1 million in 2019 and achieve $2 million by 2022.

Rank used to export more than $1 million worth of product in 2015, but this has sharply declined to just above $100 000 as the company struggled for competitiveness following the weakening of regional currencies as well as the use of inefficient machinery.

“New machinery also enables us to target Francophone markets (Congo) who have very specific requirements,” said Mr Naik.

He gave an example of the counter book machine that was installed in 2016 in a market with 100 percent imports from SA at a cost of $1 million including transport and spares.

“We estimate that in 2017 import substitution as a result of the new machinery amounted to $500 000.

“Our first export of the product was into South Africa in August 2017 for $50 000. Further orders were placed by customer up to $200 000 but shortage of foreign currency led to orders not being fulfilled,” said Mr Naik.

He said the limited availability of foreign currency was the biggest challenge that the company was facing and risked chances of importing the new machinery which costs $878 000 excluding freight.

“We urgently require deposit of 25 percent ($219 500) as manufacturing (of the machinery) has already started,” said Mr Naik in his appeal to the RBZ officials.

“The balance of the cost will be required within two to three weeks to ensure shipment in August so that we are manufacturing for the forthcoming Back-to-School period,” said Mr  Naik.

He added that the machine was specifically being made for Rank and will be one of its kind in the world, but failure to make a deposit on time will result in the supplier selling to other buyers.

Minister Mavhima who also took time to tour Rank’s operations implored the RBZ to assist the stationery manufacturer, saying the company is one of the key suppliers of stationery in the education sector.

Rank imports approximately 90 percent of its raw materials from countries such as Russia and Canada following the closure of local suppliers such as Kadoma Paper Mills and Mutare Board and Paper Mills.

The new machine will require raw material requirements for newsprint and bond paper worth about $400,000 per month.

This is in addition to another $600 000 per month that is required for raw materials and paper for other machinery.

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