Martin Kadzere Senior Business Reporter
Industrial capacity utilisation has been badly affected in the past few months due to lockdown restrictions meant to curb the spread of coronavirus, according to latest Government report.
Declared a pandemic by the World Health Organisation on 11 March this year, the highly contagious disease, which has so far killed 776 000 people and infected nearly 22 million worldwide, has rattled global economies.
Zimbabwe introduced lockdown restrictions at the end of March as part of efforts to limit the spread of Covid-19.
Other cross cutting challenges noted by the report, undertaken by the Ministry of Industry and Commerce, include foreign currency shortages for the importation of raw materials and spare parts, delays at the borders as clearance process taking long for both imports and exports and depressed demand.
The report provides an overview of the state of industry focusing on major companies. It is divided into the various sectors namely food and drink and tobacco, wood and furniture, textiles and clothing, leather, metals and electricals, chemicals, fertiliser, plastics and packaging, cement and the motor industry.
It covers all 10 provinces on the performance of industries during the lockdown period that commenced from the 30th of March.
The most affected sectors include motor industry, printing and packaging, fertiliser, retail, dairy, baking and textile and clothing.
“Generally, the major challenges being faced by all companies are to do with reduced demand as disposable incomes are low,” said the report.
“Closed borders have affected imports and exports. Lockdown restrictions including the curfew are affecting the companies in terms of operating hours, which consequently affect the level of industrial production.”
In the printing and packaging, there was reduction in employment as casual and contract workers were stopped.
Capacity utilisation is at 33 percent and demand is at its lowest in five years due to short working hours and disruptions to employees accessing work stations.
Most of the initiatives that had been undertaken on exports halted as the external markets are also locked down.
In the fertilisers industry, demand has been low as farmers are not travelling due to restrictions. However, there was high demand for ZimPhos products such as aluminium sulphate as the demand for clean water firmed.
Sable Chemicals on the other hand produced only nine percent of its output target.
The baking industry is operating at between 35 and 40 percent of its potential. The lockdown regulations have badly affected the informal market, which accounts for 74 percent of bread sales.
The dairy industry had overall capacity utilisation of 34 percent in July 2020 and experienced a 4 percent decrease in employment.
The motor industry has remained subdued during this lockdown and sales volumes for Completely Built Units were down 70 percent compared to the same period last year.
Bus maker AVM Africa had a 90 percent reduction in production due to closure of markets for buses such as schools, intercity and rural buses.
On the other hand, Willowvale Motor Industries, has not had any production of new vehicles since the lockdown began.— www.ebusinessweekly.co.zw.