BY TATIRA ZWINOIRA
FREIGHT-FORWARDING firm, Unifreight Africa Limited chief executive Robert Kuipers says the company was now taking payment in fuel to reduce costs.He said this was because foreign currency shortages had had a negative impact on the business as part of operational expenses which continued to increase on a month-on-month basis due to the hyperinflationary environment are paid for in forex.
With fuel taking a significant cost of monthly expenses, the firm has had to take the precious liquid as payment as sourcing foreign currency from the auction to import it has proven not to be cost effective.
“We have a fuel tanker fleet and we do distribution for Total. We have worked very closely with Total and effectively received payment in fuel which worked quite well for us,” Kuipers told NewsDay Business.
“The first thing we want to do is to focus on foreign currency generation. Wherever we can, we want to look for customers that are able to pay in forex. Secondly, we want to look for customers that can pay us in fuel like I mentioned the Total contract. And then thirdly, ensuring we get paid so we are even taking payment in products.”
He said in order to increase foreign currency receipts to pay for some of their monthly expenses such as fuel they were offering discounts to clients who pay in foreign currency.
“We use the official rate which is addressed by the kind of discount on offer. But, what is also going to happen now is that they are also putting a retention on nostro accounts, which effectively is just another tax. Basically, getting paid in nostro as opposed to United States dollars will attract a different rate now,” Kuipers
The Reserve Bank of Zimbabwe recently announced that 20% of all locally generated foreign currency would be liquidated onto the foreign currency auction.
“They are keeping 20% at the bank auction rate, but there is no guarantee of getting your money at the auction rate. There is so much red tape and we really struggle to get the auction money,” Kuipers said.
“We have been able to access some, but a very small proportion of our monthly needs, probably less than 10%.”
The company has recently been charging foreign currency for the movement of tobacco as part of efforts to increase its foreign currency stock.
Efforts to generate foreign currency are being made at a time the company has a total foreign currency requirement of over 60% of its total expenses per month, but has not been able to meet the cost for repairs, fuel and maintenance for its trucks.
Kuipers said they opened a food distribution division last month where they are sourcing fast-moving consumer goods to sell to clients.