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Business Reporter
APPOLLO TYRES Ltd, trading as Dunlop Zimbabwe, says it has lined up a number of growth strategies including taping into the informal sector in order to increase volumes and profit earnings.

Briefing a delegation of World Bank and African Development Bank (AfDB) executives during a tour of the company in Bulawayo yesterday, a senior company representative who declined to be named said Dunlop’s growth was hinged on increasing volumes and expanding market share — hence the resolve to engage the informal economy.

“Our strategy is to produce new products and finding alternative markets locally, which is the informal sector. There’s a lot of activity in the informal sector and we want to offer them a facility to buy directly from us,” said the official.

“This is a market we’ve preciously not addressed and we see great potential in that sector.”

The informal sector has become a dominant economic force in the last few years in Zimbabwe with estimates that close to $5 billion was circulating in the sector.

Surveys have shown that the bulk of players in the informal economy rely on imports for raw materials and product services due to price mismatch with local firms.

The trend has contributed to a huge trade deficit while negatively affecting domestic competitiveness.

Dunlop, whose capacity utilisation hovers around 30 percent, has 300 workers from a peak of about 800.

The giant tyre maker relies on exports with an average of 40 to 45 percent of its products sold to countries such as South Africa and Zambia.

The official said plans were underway to introduce a new production line that will enhance product competitiveness in the face of increased imports that choke their operations.

“We’re in a difficult time but have a positive attitude. Our plant is capital intensive and we need to buy additional equipment,” said the official.

He also said the mismatch between the weakening South African rand and the United States dollar has a negative bearing on earnings as the company does its expenditure in dollar terms in return for a weak rand currency.

Dunlop is one of the oldest companies in Zimbabwe having been incorporated in 1959.

The visiting delegation was led by World Bank executive director responsible for Africa Group 1, Louis Rene Peter Larose. He was accompanied by Industry and Commerce permanent secretary Abigail Shonhiwa and senior government officials.

The team also held meetings with management from the National Railways of Zimbabwe, Archer Clothing and CSC.