THE Confederation of Zimbabwe Industries (CZI) has projected capacity utilisation to increase to 48% in 2018 from 45,1% as companies continue to invest in growing their businesses, businessdigest has learnt.
By Melody Chikono
However, this is dependent on mitigation measures employed on foreign currency allocation and the impact of rainfall patterns on the agro-processing sector.
According to the CZI, these two factors are threats that have continued to hamper efforts by industry to enhance capacity.
Last year, the country’s capacity utilisation dropped by 2,3% to 45,1% from 47,4% in 2016, weighed down by cost and shortage of raw materials, low local demand and foreign currency shortages but volumes increased 5%.
CZI president Sifelani Jabangwe told businessdigest on Wednesday that results from last year show that a number of companies are making investments towards increasing their capacity and, with renewed interest for investment in Zimbabwe, the capacity unitisation will certainly surpass last year’s.
“Foreign currency allocation and impacts of rainfall patterns on the agricultural sector which in turn affects agro-processing have remained threats to the capacity utilisation. If these can be mitigated, we are certain it’s going to be between 47% to 48%. Last year, although the capacity utilisation fell, volumes rose by 5%, which is not a bad thing,” he said.
Industrial capacity utilisation peaked at 57,2% in 2011, before sliding to 44,2% in 2012; 39,6% in 2013; 36,3 % in 2014 and 34,3% in 2015.
Meanwhile, an Italian delegation is expected in the country to scout for areas of investment. The delegation, led by Confindustria — the employers’ confederation and the national chamber of commerce — is based in the Italian city of Reggio Emilia. The CZI signed a memorandum of understanding with Confindustria Italy to facilitate mutual trade and investment.
“I will be meeting the Italian ambassador next week to discuss the timelines of the arrival of the Italian delegation. But they will be coming this year, that is, Confindustria and other potential investors. The CZI delegation visited Reggio Emilia and Milan regions.