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Mr Busisa Moyo

Oliver Kazunga, Senior Business Reporter
MANUFACTURING companies should embark on extensive outgrower schemes with local farmers to increase production of critical inputs and reduce imports, an industry expert said.

The Confederation of Zimbabwe Industries (CZI) president Mr Busisa Moyo who is also the chief executive officer of a leading cooking oil producing firm, United Refineries Limited, said this in an interview following reports that capacity utilisation in the cooking oil industry has plummeted to below 35 percent from over 90 percent.

According to the Oil Expressers Association of Zimbabwe president Mr Sylvester Mangani, capacity utilisation in the cooking oil industry had drastically gone down due to failure to secure adequate foreign currency to import raw materials.

Mr Moyo said the companies that were not largely affected were those that source raw materials such as soya beans and crude oil locally.

“What the Oil Expressers Association of Zimbabwe president (Mr Mangani) is saying is correct. Capacity utilisation in the cooking oil industry has been negatively impacted by the lack of foreign currency and the inability to buy raw materials,” he said.

The CZI president said in the long-term the local oil expressers need to promote extensive outgrower schemes for oilseed countrywide.

“In the long-term, we need to get our agriculture up so that we improve production of oil seed such as soya. As an industry, we are looking for land of about 100 000 hectares to utilise under soya farming so that we boost supply of the raw material. At present, the country is producing 40 000 tonnes of soya annually against a national demand of 350 000 tonnes,” said Mr Moyo. Recently Industry and Commerce Minister Dr Mike Bimha reported that capacity utilisation in the cooking oil sector was now at 90 percent.

“His sentiments are based on historical information such as the monthly reports. For example, in the month of September, everybody in the cooking oil industry was above 65 percent. But because payments for raw materials to foreign suppliers are not going through due to forex shortage, capacity utilisation has drastically dropped,” said Mr Moyo.

He said other industries that rely on imported raw materials had also not been spared from the adverse effects of foreign currency shortage.

In light of the foreign currency shortage, the cooking oil producers have approached the Reserve Bank of Zimbabwe to lobby for an increase in forex allocation to prevent further drop in capacity utilisation.

— @okazunga.