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Business Reporters
BATTERY manufacturers are targeting a manufacturing capacity of up to 90 percent by mid next year but lament the effect smuggled products are having on the sector’s performance.

A number of companies have raised the red flag over the continued smuggling of products which include clothes, cooking oil, batteries and tyres into the country.

Local manufacturers bear the brunt of high input costs and face huge costs of capital at a time when the market is flooded by the cheap illegal imports.

Battery manufacturers say most of the batteries illegally brought into the country are substandard. Battery Manufacturers Association of Zimbabwe president Mr Laurie Hoffman said in an interview with The Herald Business that consumers are being shortchanged by the devious businesspersons who import fake batteries.

“The battery industry is struggling. We don’t have a problem with legitimate imports but with the smuggled products. We can’t compete with smuggled batteries as they do not pay duty. We have lost massive capital through smuggling,” said Mr Hoffman.

Current installed capacity for batteries manufacturers is “almost enough to meet demand”, according to Mr Hoffman.

“We need to change the technology to manufacture. Currently capacity is about 55-60 percent to installed capacity but in a short space of time we should be around 90 percent by early to mid next year.”

He said the rand has devalued by 37 percent this year alone, giving local manufacturers a 40 percent advantage over their South African counterparts. Early this year BMA presented a position paper to the Minister of Industry and Commerce, Mr Michael Bimha, in which the association estimated the total vehicle population within Zimbabwe to be between 850 000 and one million vehicles. From this figure the demand for automotive batteries has been assessed to be +/- 27 500 units per month in the market.

Local manufacturers contribute 12 500 units to this demand and official imports averaged at 6 740 per month, leaving an unaccounted import balance of 9 240 units per month, thus implying that the majority of batteries coming from outside Zimbabwe are entering illegally.

“Further, it should be noted that the number of batteries that are suspected to be imported under 8507.2000 and are in fact sold as automotive batteries in Zimbabwe are not included in these figures,” BMA said.

The association said the volume of automotive battery units imported has increased from 53 262 in 2009 to 80 876 batteries in 2013, equating to a 51,8 percent growth over the four year period. These statistics only relate to official imports and do not take illicit imports into account.

“The volumes of imported batteries into Zimbabwe continue to rise unabated while prices of imported batteries continue to force local manufacturers to sell their products at unenviable prices, just to keep their doors open. This situation is not sustainable,” they said.