HomeBusinessManufacturing capacity to decline to 30%: CZI

Manufacturing capacity to decline to 30%: CZI

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HARARE — Zimbabwe’s manufacturing capacity utilisation — a measure of the extent of factories’ use of their installed productive potential — is expected to fall by almost ten percentage points to around 30% in 2014, an industrial body has said.

The Confederation of Zimbabwe Industries (CZI), which conducts an annual capacity utilisation survey, says its 2014 report was likely to show further decline from the average 39,6% levels registered last year.

CZI Mashonaland chamber president Sifelani Jabangwe said capacity across sectors was not expected to improve due to the decline in aggregate demand.

The current 30% of capacity for companies in Mashonaland “is likely to be reflective of the national average capacity utilisation because most of the companies (that have remained open) are in the province,” Jabangwe said in an interview during a CZI-organised tour of several plastic packaging manufacturers on Friday.

This would be the third straight year of declining manufacturing capacity in Zimbabwe. Capacity fell to 44,2% in 2012 from 57% in 2011.

Zimbabwean companies have in the past decade struggled due to a critical shortage of liquidity, increased foreign competition and low consumer demand.

Resultantly, numerous companies heavily downsised while others closed. Statutory pension fund, the National Social Security Authority reported that 700 firms have shut down since 2011.

— The Source

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