Source: Quest Motors capacity utilisation falls | The Herald September 26, 2016
Tinashe Makichi Business Reporter
Quest Motors’ capacity utilisation has fallen to below 5 percent due to its failure to make foreign payments for critical raw materials.
In an interview with The Herald Business last week, Quest Motors chief executive Talik Adam said this is despite the fact that the company falls under the manufacturing category which is given top priority on the Reserve Bank of Zimbabwe import priority list.
“By virtue of us being a manufacturing company we are automatically on top of the RBZ’s priority list but we have been facing challenges in procuring critical raw materials due to challenges in making foreign payments. That has also seen our capacity going down to below 5 percent.
“It is unfortunate that this is happening at a time when we need to procure more knocked down kits and spares for our business but we remain positive as we are going towards the end of the year,” said Mr Adam.
The RBZ recently further revised the import priority list moving tuition fees and student living expenses and cash importation to the top list.
The list which started off with six items has now grown to nine to include, cash importation, school fees and remittances of salaries for Zimbabwean diplomats stationed abroad.
The priority list was meant to ensure fair and equitable distribution of foreign currency reserves to priority areas within the country and the manufacturing sector was top of the list.
“On the back of the current challenges we are facing I am still calling for more Government support for our operations to thrive and we will keep singing that song,” said Mr Adam.
Addressing the Parliamentary Portfolio Committee on Transport and Infrastructure early this year Mr Adam said the revival of the country’s vehicle assembling sector can be backbone for Zimbabwe’s economic turnaround.
He said line ministries and parastatals have continued to defy a directive issued by the Office of the President and Cabinet through a circular in 2011 compelling purchase of motor vehicles from local assembly plants by Government departments and Parastatals, an industry player said.
The circular directed that any deviation from this norm needs to get authority from Government because local assemblers have been struggling due to low volumes, while hundreds of millions of dollars are wired to foreign car firms annually. The directive on vehicle procurement was sent out to 23 Government Ministries and two public institutions.
“My factory, when it was working at full capacity on a single eight-hour shift we were producing between 12 000 and 15 000 vehicles a month, and was employing close to 15 000 people. We have tried at times to kick-start it ending up with 12 000 vehicles sitting in my plant and without being able to pay the suppliers for it. It has created major problems. And the irony of it is we have had the vehicles sitting there but Government departments have continuously imported vehicles even the models that we are manufacturing,” said Mr Adam.
He said despite the fact that Quest Motors is producing brands like Foton Turnland locally, Government imported about 600 units of the same brand from China.