Nyanga — INDUSTRY and Commerce Minister Professor Welshman Ncube has said the closure of companies in the past few months is "disturbing". He feared more companies in manufacturing could face collapse.
In a speech read on his behalf at the opening of the Confederation of Zimbabwe Industries conference here, Minister Ncube said: "Unfortunately, we are meeting here today when the situation in industry and the manufacturing sector in particular, is facing serious threats to its very survival.
"Over the past 12 months, we have seen companies close and many jobs lost."
According to the CZI, some of the companies closed down over the past few months include Mutare Board & Paper Mills, Lion Matches, Hunyani Mill & Art Paper Mill in Norton, the Cairns Holdings canning factory in Mutare and its pasta factory in Bulawayo.
CAPS Holdings has also closed its plant in Harare while a number of pharmaceutical firms were operating below 25 percent capacity.
Several food manufacturers have resorted to importing refined sugar because of quality and cost concerns.
Minister Ncube said Government had failed to provide rescue packages to struggling firms due to "tight fiscal space".
In 2011, Government came up with the Distressed Industries and Marginalised Areas Fund (DiMAF) under which it was expected to contribute US$20 million, with Old Mutual chipping in with the other US$20 million.
DiMAF was established to reverse the trend where over 87 companies had ceased operations while many others relocated to Harare, as still others downsized operations.
But two years down the line, nothing has happened. Government also came up with the Zimbabwe Economic Trade Revival Facility, which was allocated US$70 million. But the companies identified had struggled to access the money because of the stringent conditions attached to the loans.
Addressing the conference, CZI president Mr Kumbirayi Katsande said the upcoming general elections to be held next year could worsen the situation.
"Unheard of times are before us," he warned. "Our plea to the politicians is that they spare some thought for the economy, otherwise it will be difficult to pick up the pieces after the elections. As elections pick up steam, we are going to be tested as to our maturity and non-partisan stance.
"(In a worst political scenario) . . . some of our companies will not be existent this time next year, unless something improves."
Mr Katsande is the managing director of Nestle Zimbabwe.
"We are faced with collapsing manufacturing companies - food processing, agro-chemicals, pharmaceutical and grain milling.
"Over the last 12 months we have seen many companies close and many jobs lost."
Manicaland Governor and Resident Minister Christopher Mushohwe said he too was concerned over poor performance of the manufacturing sector, particularly in his province.
"The theme of your congress jolts up the wounded hope in the people of Manicaland who have helplessly watched the demise of key strategic industries in the timber industry, agro, glass and carpet manufacturing sectors in Mutare," he said.
"Manicaland has lost its regional leadership in the manufacturing of pulp and paper. It is fast losing Cairns Holdings which is the lifeline of thousands of small-scale and communal agro and horticultural growers in Honde Valley, Eastern Highlands and Rusitu Valley. PG Glass, once the pride of Zimbabwe, is snowballed while Karina Carpets is threatened with liquidation."
The three-day conference, which began on Wednesday, is being held under the theme "Restoring manufacturing as a key pillar for leapfrogging Zimbabwe's economic growth".
More than 300 delegates are attending the congress.