GWERU – The government should revise the country’s labour laws to make them flexible enough to allow local companies to pay productivity based salaries, an industrialist has said.
Speaking to The Source on Tuesday, Zimbabwe Glass Industries (Zimglass) acting chief executive officer Gilbert Tapfuma said labour laws in Zimbabwe were contributing to the retardation of local industry growth and revival.
“Labour laws should be flexible enough to allow payment of wages and salaries based on productivity only as accrual of wages and salaries during shutdown period would mortgage future production and this is not sustainable,” said Tapfuma.
Tapfuma said most local companies were saddled with huge wage bills, which accounted for almost 50% of total revenue, a situation he said was not sustainable.
“If you look at it most companies are operating just below 30% capacity utilisation, yet we are expected to pay competitive wages. Most companies’ wage bills gobble a huge chunk of revenue and such a situation does not give room for growth at all,” he said.
Zimglass, which suspended production in October owing to lack of capital, is embroiled in a pay dispute with its employees who have not been paid their dues for the past three months.
Meanwhile, Tapfuma said the company has applied for a $15 million loan for capital expenditure and working capital from its major shareholder, the government’s Industrial Development Corporation.
“We have limited working capital and as a result we have not been able to get the raw materials as and when we want them,” said Tapfuma.
“We are appealing to the government to provide funds to support the industry,” he added.
Tapfuma said the company had also applied for $1,5 million from the Distressed and Marginalised Areas Fund, but was still awaiting a response from the fund administrators.
The government, in partnership with Old Mutual, established the $40 million revolving fund in 2010 as financial support to struggling companies like Zimglass.
Disbursements of the fund to date total $24,7 million against applications worth $32,8 million approved.
Tapfuma said Zimglass was working on exploring new markets.
with the main target being Zambia where there is high demand for flint glass used to bottle beverages.
— The Source