Zimbabwe: Furniture Makers Target to Raise Capacity Utilisation
Posted on :Monday , 19th October 2015
FURNITURE manufacturers are targeting to increase capacity utilisation from the current 30 percent, but say Government should implement measures it proposed to turnaround the sector's fortunes.
Some of the measures mooted by Government include introduction of a manufacturers' rebate for duty free importation of selected raw materials by approved manufacturers.
Furthermore, Government increased customs duty on wooden, plastic and metal furniture products and removed beds and mattresses from the traveller's rebate.
The Furniture Manufacturers Association told a Parliamentary Committee tour that with more support towards retooling, the sector could recover from years of buffeting from cheap imports.
Chairman of the Furniture Manufacturers Association Mr Phanuel Vheriwa said retooling is critical for the revival of the sector.
"We need to retool as an industry so that operating costs are reduced and the end product becomes reachable. By so doing we increase demand, we also create employment. We are, however, grateful that there is this dialogue (with Government) going on," said Mr Vheriwa.
"We are averaging 30 percent in terms of capacity utilisation. But there is potential to do much more than we are doing at the moment," he added.
Over the years the sector has been on a downturn in employment numbers, which has seen the head count dwindling to about 1 600 from 16 000 during its peak.
The sector, like many others in the country, is grappling with high finance costs with banks charging interest rates of between 12-18 percent per annum. This is hampering efforts to retool and to recapitalise operations, resulting in low uptake of labour.
The association reminded the committee about the delays in the implementation of the Statutory Instrument announced in the 2015 Mid-Term Fiscal Review by Minister of Finance and Economic Development Patrick Chinamasa to introduce 40 percent Duty Free importation of selected raw materials by approved manufacturers.
Universal Furniture managing director Mr Ken Jackson said capacity utilisation at the firm is averaging 70 percent and there is room for growth, but bemoaned the cost of importing leather.
"We spend about $150 000 per month for leather imports. Other raw materials such as foam rubber are manufactured locally," said Mr Jackson. The leather is imported from South Africa and Italy.
Some members of the furniture manufacturers association said Government should minimise export of hides, which are processed in other countries and shipped back to Zimbabwe as leather.
In the mid-term review Minister Chinamasa said raw hides and skins are currently being exported without satisfying the needs of the local tanneries, contrary to the legislative requirements as well as the objectives of the Leather Sector Strategy.
In pursuance of the value addition strategy as enunciated in Zim-Asset, Minister Chinamasa removed the Tax Free Export Quota of 25 percent on raw hides and skins, with effect from this month.
Exports of hides and skins now attract an export tax of 15 percent or $0,75 per kg, whichever is higher.
The measure are expected to ensure adequate supply of raw hides and skins to the local tanneries.
The Furniture Manufacturers Association has 32 members and is recruiting from the informal sector.
Please Select an Option
-
Exhibiting
-
Visiting
-
Information
Expogroup
Expogroup is a full service exhibition organiser with over 28 Years experience in International trade exhibitions. Our current portfolio includes 28 annual exhibitions from a diverse range of industries being held across the Middle East & Africa.
EXPOGROUP © 1996 - 2024 | Privacy policy