Econet urges suppliers to reduce prices by 15%

via Econet urges suppliers to reduce prices by 15% – NewsDay Zimbabwe July 8, 2015

Econet Wireless has asked most of its local and international suppliers to cut the prices of their supplies to the company by more than 15% as part of a cost-cutting drive under the harsh economic environment.

The move comes after Econet cut its capital expenditure programme by 25% for the current financial year while staffers have had their salaries cut by 20%.

The measures, which are part of Econet’s cost-cutting drive, affect all suppliers of goods and services. A task force, led by the head of Econet Wireless Global Tracy Mpofu, who is based in South Africa, is working at the local Zimbabwean unit to
ensure the successful implementation of a major cost-cutting exercise.

“Any supplier who sells goods or services to Econet Wireless Zimbabwe must cut prices by at least 15% or will be blacklisted as a supplier with effect from the end of July,” a statement from Econet read.

Econet Wireless Zimbabwe CEO Douglas Mboweni confirmed the new measures, saying: “We ourselves were forced to lower our prices by 40%, so if our suppliers don’t cut their own prices, we will go out of business. We do not think 15% is too much to ask others for.”

The group-wide cost-cutting initiatives are expected to go on for several months. Even subsidiaries of the company, such as Steward Bank and Mutare Bottling Company, have also been ordered to do the same.

Mboweni said Econet was a strong company which had the capacity to weather any storm.

“We have carefully analysed the prevailing economic situation, and we have taken the corrective measures to protect the business. We urge others to emulate our example by being proactive rather than to just sit and watch helplessly,” Mboweni said.

A number of companies have complained on the high cost structures as suppliers inflate prices. A number of firms are leaving the central business district over the high rentals charged by property firms. Experts say local businesses still have the hyperinflationary mentality leading to unjustified price increases.

COMMENTS

WORDPRESS: 7
  • comment-avatar
    R Judd 6 years ago

    Econet you cannot dictate. If I was your supplier I would invite you to take your business and place it in the spot where it fits best

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    R Chipamaunga 6 years ago

    i am in total agreement with Econet consumers are being ripped off on a daily basis this hyper inflation mentality must stop

  • comment-avatar
    Truth 6 years ago

    No problem, provided the government gets rid of the blood sucking useless entities like ZTA, NEC, Indigenous Law licence, borehole licences etc etc = the list is endless….and allows us to do what are meant do..generate business, profits and employment

  • comment-avatar
    Truth Be Told 6 years ago

    Truth u are so lost, if Government gets rid of entities like ZTA who then does regulate the sector it regulates, who markets the country. Check ur facts.

  • comment-avatar
    Truth Be Told 6 years ago

    @Rudd, Econet can dictate as u dictate when buying. It’s high time somebody did that coz things are just too expensive in this here country.

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    Gudoguru 6 years ago

    mboweni must drive his own business, lets see if he has clout. If your business depends on suppliers, I suppose you are intending to dismiss current suppliers of high quality goods and replace them with BBBEE or family relatives who will get their benefit in the long term.

    I suspect some fraudulent intention

  • comment-avatar

    I am surprised. I have been in business all my life, and you should constantly negotiate with suppliers. If suppliers are ripping you off, you have to go into that business to protect yourself.

    In a Free Market with free competition, prices are always lower. Which is why competition is essential.

    Unfortunately Zimbos have a “Money Tree” mentality. Speak to anyone and they will say, “I need to get some money”. What they should say is, “I need to EARN some money”. A small but vital difference.

    It goes without saying that corruption, bribes and kickbacks drive up prices to the consumer. Just ONE reason corruption is bad.