Put more goods on import restrictions: Businesses

Source: Put more goods on import restrictions: Businesses – Sunday News Jul 10, 2016

CAPTAINS of industry are pushing the Government to include more goods under import restrictions arguing that most local companies were now able to meet national demand. Confederation of Zimbabwe Industries president Mr Busisa Moyo said more local companies whose goods were not included on theStatutory Instrument 64 of 2016 have already come out demanding that the Government include their products on the list.

Some of the goods where commercial importers, according to SI 64, now require permits include bottled water, mayonnaise, salad cream, peanut butter, jam, mahewu, canned fruits, vegetables, pizza, yoghurts, flavoured milks, dairy juice blends, ice creams, cultured milk, cheese, coffee creamers, camphor creams, white petroleum jellies, body creams, plastic pipes and some building materials.

“Other companies that are not on SI 64 of 2016 have already come up and said look we are able to meet national demand. So there is a lot of companies that are producing products locally that are able to meet demand and that would like to be on that list of restrictions as we continue our import substitution programme or restricting our imports so that we reduce our current deficit. We are also still compiling the list for submission to the Ministry of Industry (and Commerce) but these include ox-drawn ploughs and implements that can be manufactured locally,” Mr Moyo said.

Although he could not give specific companies and their capacity to support the push, Sunday News researched on some of the companies which indicated that they were now able to meet local demand. Tea producing company Tanganda said it wanted tea bags to be added on the list. Tanganda financial director Mr Henry Nemaire said the company was now producing 8 000 tonnes of tea annually against a national demand of 2 000 tonnes. This, he said, meant the company was producing an additional 6 000 tonnes of tea which is being exported hence there was no need to burden the country with imports. As part of meeting new trends, Mr Nemaire said the company has invested in two state-of-the-art tea bag packaging machines.

Nestle Zimbabwe which produces Cremora said production capacity of the powdered milk has increased from 3 000 tonnes to 7 500 tonnes annually. Although Zimbabwe needs 8 000 tonnes annually of Cremora, the deficit could be met with other companies who are also already manufacturing the same product.

“We have invested over $30 million in the last five years and we can meet national demand. The only deficit is of those mini packets that are required by hotels,” said the company’s corporate affairs manager Mr Farai Munetsi.

Another local company, Cairns, said it has capacity to produce 43 000 tins of baked beans per month adding that it can meet national demand after it has invested in new machinery that produces 1,9 million cans of beans. However, Cairns Foods Mutare operations manager Mr Joseph Mavhu said despite installed capacity being enough to meet national demand, the company was operating between 15 and 25 percent capacity because they could not push volumes as they were facing competition from imports, hence import restrictions will allow them to increase production.

Commenting on the capacity of other companies even those who have already benefited on the import restrictions, Mr Moyo said the industrial body was still compiling comprehensive data but said companies that were not producing enough were in that position because of shortage of inputs and not capacity.

“We are still compiling the data for Ministry of Industry (and Commerce) for various sectors but we are confident there is sufficient capacity. The situation needs to be monitored and permits given where required to allow for consumer choice and find a balance. But we must realise that currency is in short supply and should be directed to raw materials and diaspora inflows should be directed to raw materials,” he said.

He said the country was a net importer, importing goods worth about $3,3 billion last year with imports close to $300 million per month further citing that the Government has come in to support local industries because it recognises that industry was in a high cost environment to compete effectively with imports.

Although in the long run, industry needs to be supported, consumers have complained over the pricing of locally produced goods which they said were far too much expensive hence they are forced to look for cheap options. A general survey revealed wide differences in prices of goods even for some of the products which would have been imported from far away countries.

For example, a locally produced standard bottle of beer manufactured locally costs $1 for contents only. A similar imported beer, some manufactured as far as Netherlands costs less, as low as 70 cents (contents and bottle). The same imported beer would have incurred transport costs from the country of source before duty and other overheads are added. In addition, it has been reported that some goods originating from Zimbabwe are being sold cheaper in other countries compared to goods on local shelves.

Nonetheless, Mr Moyo defended the pricing structures, saying the high cost business environment which was necessitated by various Government legislation such as taxes, duties, utilities and numerous charges were making locally produced goods uncompetitive.

“We need import substitution mechanism, if something can be produced locally as a country we should be united about allowing it to be produced locally, but that’s not the aim. Our ultimate aim is not just to substitute imports because it’s a more difficult thing to achieve. What we want to achieve is export, that’s the ultimate aim but in order to get to export we must first of all reign our import deficit then we can deal with our high cost environment. If these things can happen concurrently then we are export competitive,” said Mr Moyo.

Retailers on the other hand said although imported goods were still cheaper than locally produced goods, the shops were making efforts to try to match the prices. They said although cash shortages had resulted in some retailers pushing prices.