28 November 2012

Zimbabwe: 'Some Firms in Economic Sabotage'

Strategic industries in Mutare should not be allowed to close down but instead, investors to revive them should be urgently sought, a senior Government official has said.

Manicaland Provincial Governor and Resident Minister Chris Mushowe said this in an interview last week. He bemoaned the closure of several companies in Mutare that played a crucial role in providing goods that are now being imported.

"There is an urgent need to revive all the defunct strategic industries by courting potential investors," said Mr Mushohwe.

"Mutare used to produce pulp and paper, some which was exported, but the country is now importing yet we have abundant plantations in Manicaland."

Zimbabwe used to be one of Southern Africa's major paper producers, but no longer has any paper mill and now relies on imports from South Africa.

Mutare Board and Paper Mills as well as Hunyani Papers shut down due to operational problems. Mr Mushohwe also bemoaned the imminent closure of Karina Textiles in Mutare, which is the sole manufacturer of carpets and hand-knitting yarn in Zimbabwe.

"The major shareholders in Karina are white foreigners who are seeking voluntary liquidation. "The question that begs answers is what happened to all the money and profits they made over the years?" he said. Mr Mushohwe likened the behaviour of some companies to economic sabotage intended to bring the country's economy to its knees. He said some companies like Cairns Holdings had acted contrary to the ideals of the land reform programme by shutting down operations.

"Manicaland has got a lot of smallholder horticulture farmers who depended on Cairns to buy or process their produce.

"It's sad that the company shut down and this will demean the whole process of agrarian reform," said Mr Mushohwe. The closed Cairns Mutare canning operation used to manufacture popular brands like Sun Jam, Cashel Valley and Border Streams baked beans. Mr Mushohwe said that other major industries like PG Industries had shut down, throwing hundreds of workers onto the street.

"Some companies have simply shut their factories and told workers to go home until further notice, and there is an urgent need for solutions," said Mr Mushohwe.

Industrial analysts say that dishonesty had become a hallmark to the whole discourse of company closures.

"When you listen to the captains of industry speaking, one would wrongly assume that the liquidity crunch was the only problem," said Mr Philemon Chinake, and industrial analyst.

"The problem goes beyond that, runs deeper and demands a more sophisticated approach."

Another analyst who preferred anonymity was of the opinion that rampant indiscipline in companies had spiralled out of control and would continue destroying companies if no action was taken.

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