150 companies shut shop in 2016 second quarter

Nearly 150 companies folded in the second quarter of 2016, leaving hundreds jobless as the country’s economic implosion continues to worsen, businessdigest has learnt. ‘

Source: 150 companies shut shop in 2016 second quarter – The Zimbabwe Independent July 1, 2016

By Kudzai Kuwaza

This in addition to 81 companies which ceased operations in the first quarter of this year, bringing the total number of companies that have closed shop in the first half of the year to 229.

This comes at time the economy is facing several challenges, including a debilitating liquidity crunch, low capacity utilisation and lack of cheap financing, among many others.

In an interview this week, Zimbabwe Congress of Trade Unions secretary general Japhet Moyo revealed that 148 companies from three sectors namely the construction, clothing and motoring sectors have closed.

“ We have established that 91 companies in the clothing sector have closed in the second quarter of this year,” Moyo said. “In Bulawayo, 25 clothing companies closed shop while we had 66 clothing companies shutting down in Harare.”

Among the clothing companies which ceased operations include Asmara Company (Pvt) Ltd and Lancashire Manufacturing, Moyo revealed.

He said the construction sector has also been heavily affected with 56 construction companies closing shop. Moyo revealed the breakdown of the company closures with 25 construction companies closing in Harare, seven closed in Bulawayo, three in the Gweru region, 17 shutting down in Mutare and another five closing shop in Masvingo.

Moyo said among the affected construction companies are Biticon, JD Construction and Marios Joinery.

The ZCTU secretary-general revealed that the motoring sector has also not been spared with the closure of Mutare Associated Tyres in May this year.

Moyo described the second quarter closures as shocking.

“This is definitely shocking and disturbing because the list of these closed companies used to contribute money to the union,” Moyo said. “If we were, for example, receiving US$40 000 from these companies, we are no longer getting it. It is not good news at all.”

Moyo added that the closures will have a serious impact not only on the union, but on dependents, government revenues as well as on the bottom line of retail outlets.

“The closures have got an alarming domino effect on the country’s economic prospects,” Moyo said.

This comes at a time Hwange Colliery have announced that they will retrench 1 500 workers with the National Railways of Zimbabwe also revealing that they intend to shed between 1000 and 1 400 employees as viability constraints worsen.