URL hails Govt efforts to cut doing business costs

Source: The Herald – Breaking news.

 Mr Clemence Chiduwa

Sikhulekelani Moyo, Bulawayo Bureau

BULAWAYO-based edible oil processor, United Refineries Limited (URL), has commended ongoing Government policy interventions to reduce the high cost of doing business.

Interventions have included tight monetary and fiscal policies, which have cut the gap between the formal and parallel market exchange rates from over 50 percent last year to around 25 percent.

Recently, Finance, Economic Development and Investment Minister Professor Mthuli Ncube said the Treasury would streamline taxes and review costs associated with regulatory compliance to improve the viability of business operations.

This followed President Mnangagwa’s directive for statutory bodies to ensure that their charges and regulatory requirements do not suffocate businesses but promote growth and investment.

URL management hailed the Government’s efforts to address challenges blighting businesses during a visit to Bulawayo by the Portfolio Committee on Industry and Commerce, led by Zaka South lawmaker Clemence Chiduwa.

The visit, part of the committee’s nationwide fact-finding tour, is meant to assess the ease of doing business conditions across the country.

URL is one of Zimbabwe’s largest cooking oil refineries with a refining capacity of 12 000 tonnes per year from soyabean seed, a combined 9 450 tonnes per year for laundry and bath soaps and further 30 000 tonnes per year for stock feeds.

The company currently employs 263 full-time employees along with seasonal labour, depending on the level of production activity, averaging 100 people each month.

In addition to branded product lines, URL also produces soya meal and soya bean cake, which are ideal for poultry and pig production as well as soya bean hull (which is high in fibre and ideal for cattle, chicks and mushroom growing), which are by-products of the cooking oil manufacturing processes. Annual production of the by-products is 30 000 tonnes.

URL has also branched into rice, maize meal and noodle production.

In an interview during the tour, URL general manager Mr Benjamin Blatch said the narrowing gap between the parallel market and official exchange rates had also helped reduce the cost of doing business.

Exchange rate volatility made business planning difficult and distorted pricing.

It also fuelled inflation, diminishing the value of the domestic currency and    savings.

Exchange rate stability, since the introduction of the Zimbabwe Gold in April last year, has arrested rampant inflation, restoring predictability in business  planning.

“We are seeing the disparity between informal and formal (exchange rates) converging, which is allowing a better conversion through the willing buyer willing seller which we appreciate.

“We are looking forward to a stable environment,” Mr Blatch said.

He, however, noted that the company was facing challenges accessing raw materials, due to delays in global logistics, delays at the country’s ports of entry and working capital constraints among others.

URL is one of the oldest companies that have withstood the test of time in Bulawayo and continues to be a shining example of resilience as it not only supplies critical products but remains one of the biggest employers in the city.

In his comment, Portfolio Committee chairperson Mr Chiduwa said the committee was happy with URL’s operations, as this showed its desire to grow.

He said URL was doing well on the edible oil value chain, which had the positive effect of helping cut the cost of importing edible oils and promoting local value chains.

“We came here as the Parliamentary Portfolio Committee on Industry and Commerce to assess the ease of doing business specifically looking at the operations of URL,” said Mr Chiduwa.

“We are happy with the diversified portfolio that we have seen and URL is bullish about the future, in terms of capacity utilisation, they are on 52 percent and there are a number of things that they have mentioned to us, especially the exemption to pay tax on plastics and the preferences are for the plastics to be zero rated, which will assist them to claim the VAT.

“We are also looking at the (working) capital (issues), they are very happy with the Targeted Finance Facility TFF facility, they have utilised it, but we are looking at a situation where that TFF facility can be expanded,” he said.

The TFF facility is a funding facility established by the Reserve Bank to redistribute existing excess liquidity in the market to cover the needs of other banks in short positions.

Mr Chiduwa also noted that URL was happy about the closing gap between the black market and the official exchange rates, which showed that the Government is doing well in terms of implementing business-friendly policies.

The committee has toured several companies in Harare, Mutare, Chiredzi and Bulawayo.

“In terms of the disparity that is there between the parallel rate and the official rate, they are extremely happy to say, we are moving in the right direction.

“The (high) cost of doing business was also mentioned, but it mainly has to do with electricity challenges,” he said.

“We are happy with the backward and forward linkages where they are promoting the whole value chain, starting from the farmers up to the point when we have our cooking oil.

“We also say, as a committee, there is a need for us to minimise the importation of edible crude oil, we would want that to come from local production, but as a committee, we are very happy.”

He said all the challenges raised by industrial companies would be tabled in Parliament for consideration and possible solutions.

Mr Chiduwa said the tour was part of the Government’s efforts to address costs associated with regulatory compliance and other policy and economic challenges.

This follows lobbying from captains of industry and commerce that taxes and regulatory charges be reduced or eliminated.

This overhaul is intended to simplify the licensing system and reduce bureaucratic barriers, making it easier for businesses to operate and thrive.

Cabinet has since established a high-level committee to review the existing regulations and fees, taking into account the concerns of industry leaders regarding the burdensome financial costs and hindrances to growth.