Published by the government of Zimbabwe
Bright Madera
13 November 2009
Harare — DUNLOP Zimbabwe, the country's single tyre producer has stopped toll manufacturing to South African companies following a significant increase in foreign currency inflows to procure raw materials.
Managing director, Mr Kennedy Mandevani told Herald Business that his company is now servicing the South African market through standard export arrangements.
A standard export is when a company charges a full price on everything, as the customer does not supply raw materials.
"We have moved away from toll manufacturing, foreign currency inflows have improved and we can now manage to procure our own raw materials to run our operations.
Mr Mandevani said through lines of credit from its parent company Apollo Tyres, Dunlop had managed to direct US$100 000 towards machine refurbishment since February 2009.
"We had to refurbish our machines to work at full capacity and we can now meet demand for both local and export market," he said.
The tyre company is currently operating above 50 percent and management is hoping to push production to levels above 70 percent by year-end.
Mr Mandevani said prices of tyres on the local market had improved, accounting for 80 percent of the total sales. Exports to South Africa and Zambia, account for the remainder of the sales.
At its peak in the 1990s Dunlop used to manufacture about 800 tonnes of different types of tyres a year.
Dunlop has always survived on Apollo Tyres for raw materials since the economic downturn.
However, the company is still engaged in toll manufacturing with Zambia.
In 2006 Dunlop became the first major company to embark on toll manufacturing for the export market.
This followed the approval of the company's application by the Reserve Bank of Zimbabwe in March of the same year. It's first toll consignment left for Zambia in May 2006. Thereafter, Dunlop opened another toll export market in South Africa.
Since 1996 as the trading environment worsened the company's fortunes also declined. The worst period was 2007 when the combined effects of a damaging price control system and shortage of foreign currency forced Dunlop to drastically cut expenses in order to survive.
Mandevani said toll manufacturing was part of this survival strategy.
Meanwhile, Dunlop will be celebrating its 50th Anniversary on Wednesday.
The company was established in Zimbabwe in 1912 when the first licence to trade was obtained.
The company was then known as Dunlop Rhodesia Limited and was registered in 1953 and its name changed to Dunlop Zimbabwe Limited in 1980.
The tyre factory was opened in 1959 on a 44-acre site in Bulawayo, with a consumer and industrial factory being commissioned on the same site in 1969.
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