Tinashe Makichi : Business Reporter
The Zimbabwe Clothing Manufacturers Association says 2016 will most likely be subdued as sustained shortage of long term finance continues to affect the industry’s recapitalisation efforts.The sector requires about $200 million for recapitalisation. ZCMA chairman Jeremy Youmans told The Herald Business on Tuesday that lack of long term and affordable funding has continued to affect competitiveness and productivity of the clothing manufacturing sector.
“We do not expect to see significant growth in 2016. There has, however, been some momentum gained through various support measures which are currently being implement but the gains are likely to be offset by negative effects of the drought, commodity price downturn and the significant devaluation of currencies across the region.
“In 2015, the clothing industry which manufactures clothing from fabric had a mixed performance with some significant successes, but also some failures. We estimate it is operating at about 35 percent overall, but some companies are above that figure,” said Mr Youmans.
”Shortage of long term affordable finance continues to hamper the recapitalisation of companies so that they maintain competitiveness and productivity.”
Mr Youmans said the clothing sector can significantly improve with only about $5 million investment into capital equipment and raw materials. He said there is a possibility of growth in the sector if more focus is put on local procurement from Government, private sector and consumers.
The textile industry is currently operating at about 15 percent capacity. Mr Youmans said the textile industry faces the same challenges as the clothing sector but requires a greater amount of investment.
“Therefore it also is not likely to see significant improvement during 2016 without further local procurement. Within textiles I believe there are 18 companies still operating. The infrastructure is mostly still in place from prior periods of better performance, so it relatively simple to get it working again,” said Mr Youmans.
He said ZCMA will continue to encourage more local procurement to drive growth in both sectors in 2016 in spite of the current environment.
“So 2016 is likely going to be a tough year, but if we all focus on maximizing local value addition and beneficiation, through support to our local industries, the whole country will benefit,” he said.