By Elita Chikwati
Government has pledged to assist manufacturing companies with foreign currency and new equipment to boost their production capacity and ensure they generate their own foreign currency through exports.
This was said by Vice President Constantino Chiwenga after touring Surface Wilmar plant in Chitungwiza yesterday.
VP Chiwenga was accompanied by Minister of Finance and Economic Development Patrick Chinamasa, Minister of Industry, Commerce and Enterprise Development Dr Mike Bimha and Minister of Lands, Agriculture and Rural Resettlement, Air Chief Marshal Perrance Shiri (Rtd), deputy chief secretary in the Office of the President and Cabinet, Mr Justice Mpamhanga, among others.
VP Chiwenga said Government was aware of the challenges faced by processing companies, particularly oil expressers that included shortage of raw materials and unavailability of foreign currency.
“Government has noted this concern and will in the short term support request by oil expressers for increased foreign currency allocations mindful of the shortages of foreign currency and competing demands for the same in the economy,” he said.
“We are not looking at one issue. This is why we are also going to retool companies to produce effectively. We have to pull out old equipment and provide new equipment to boost production to capacity and promote export.”
VP Chiwenga said Government was prepared to come up with incentives to support the manufacturing companies.
“People who produce are the people whom we are going to support and that we have assured,” he said.
“If you (Surface Wilmar) go to over 50 percent capacity, you will be able to generate foreign currency and you do not have to queue at the RBZ for more foreign currency.
“We will support you to get there and thereafter you must support the RBZ by export and also bringing in the excess foreign currency you would have generated. So, we will find the money whatever it may take us, we will find the money and give you.
“If we give you the money, then you increase production, employment will go up and we will also get that foreign currency we need and we also support other companies.”
Minister Chinamasa said shortage of foreign currency was affecting production.
“There is a general shortage of foreign currency; some of it as a result of the protection we have given to local enterprises,” he said.
“Some manufacturing enterprises have increased their capacity and are producing for the local market, but not exporting.
“We are encouraging companies to go into exports to increase export earnings. We want more investment into production. Processing companies can partner with institutions that have land to produce more raw materials and support farmers as well.”
Minister Chinamasa urged the companies to invest into research and development of hybrid seed for cotton and soya bean.
“It is very important that we increase production to increase export earnings,” he said.
“As long as there is low production, there will be low export earnings and the problem of foreign currency will persist.”
Minister Bimha said Government was ready to assist the manufacturing industries.
“The other time oil expressers raised an issue and we came up with the SI64 which helped them a lot,” he said.
“As much as we have helped, you should also reciprocate by increasing production to export and also to diversify.
“We will continue to maintain the relationship. As Government we are open. At any time our offices are open for you to come and engage and certainly we would want to see production going up and reducing imports and exports growing.”
Minister Shiri said the shortage of raw materials had presented an opportunity for farmers to boost production as there was a ready market for their produce.
“We need to link the companies with farmers and advise farmers with the types of raw materials required for the production processes,” he said.
“It is a sweet challenge as it offers farmers (an) opportunity to create wealth in the process of supplying you with raw materials.”
Surface Wilmar chairman, Mr Norattam Somani, said the company was operating at 22 percent due to shortage of raw materials such as soya bean and sunflower seed.
He said things could improve if Government could subsidise agricultural inputs so that farmers could access affordable inputs to boost production.
Mr Somani complained of the VAT and tax charged by Zimra which he said was affecting viability of the business.
“We require $11 million foreign currency for us to boost production to 40 percent and be competitive and able to export,” he said.
“When we established this company, the country was producing 300 000 tonnes of cotton seed and now it is down to 30 000 tonnes. Because of that reduction, there is no other solution than to import crude oil.
“We are confident that with the new Government we will get the cotton industry back on track as well as soya bean production in the country.”
Surface Wilmar is one of the largest oil expressers in Zimbabwe.
The company invested into Olivine Industries and developed value chains in edible oil refining, stockfeed manufacturing and manufacturing of a wide range of products such as soaps, margarine, tinned fruits and vegetables.