Textile factories rendered redundant

via Textile factories rendered redundant…as firms import clothes worth $2m | The Herald June 25, 2014

TEXTILE companies imported clothes worth about $2 million in the first quarter of this year rendering their textile factories redundant and making Government’s efforts to protect the manufacturing sector futile, a senior Government official has said. The Zimbabwe Revenue Authority commissioner general Mr Gershem Pasi told Parliament’s Portfolio Committee on Budget, Finance and Investment Promotion on Monday that top companies such as Edgars, Topics, TM Supermarkets, Truworths and Greatermans were importing finished clothes instead of raw fabric to make textile products.

Mr Pasi said Egdars imported clothes worth – $1,3 million, TM Supermarkets – $240 000, Truworths – $97 000, Greatermans – $93 000 and Topics – $41 000.

The companies are among the textile players requesting Government to enforce a ban on cheap textile imports from Zambia, Mozambique and South Africa.

The Zimbabwe Clothing Manufacturers Association is lobbying Government to impose a ban on textile imports.
ZCMA has said the textile industry is being heavily compromised by cheap imports from China and second-hand clothes from Mozambique.

Zimbabwe is importing at least $300 million in clothing textiles each year. The textile manufacturers want Government to reduce duty on raw materials and spare parts to at least 10 percent, and a corresponding increase on duty on imported ready-made garments to about 65 percent.

“Clothing is a major item and there are issues there. We have had complaints from local industries saying they are unable to compete with the cheap imports,” said Mr Pasi.

“Sometimes they complain that they are manufacturing clothes locally and the imports are driving them out of business. On the face of it, it makes sense but if you look at the figures it’s worrisome because right now the imports which are coming are not of fabric but are from the big clothing companies. There is no cloth or fabric but they are importing clothes,” he said.

Government’s idea of imposing heavy duty on finished clothing was to protect local manufactures which leads people to smuggling but local industry is manipulating the systems.

“The local industry itself is actually importing finished products. It means that there is no employment creation in their factories . . . it means that the factories are closed.

“The fact that we are putting prohibitive duties on the clothes to protect something that is non-existent would we not be better off if we open up and allow people to import freely and declare and we get some duty rather than having people smuggling” said Mr Pasi.