Paul Nyakazeya, Group Digital Editor The supermarket chain, one of the country’s largest in terms of outlets, said it imported between 60 and 65 percent of all its retail products from South Africa due to depressed capacity utilisation in the domestic manufacturing sector.
In an update of the company’s operating environment at a briefing on Tuesday, OK Zimbabwe chief operating officer, Albert Katsande, said despite the company subscribing to the Buy Zimbabwe Campaign, local products were still unavailable to local retailers because manufacturers were not producing enough.
“Between 60 percent and 65 percent of all the products on our shelves are mainly from South Africa. The balance is produced locally,” said Katsande.
Katsande said most of the house-ware products in OK Zimbabwe outlets were being imported from Asia, mainly China.
“We stand to support the Buy Zimbabwe initiative and subscribe to it fully. However, that side is still limited and we are importing mostly from South Africa,” said Katsande.
The Confederation of Zimbabwe Industries (CZI)’s Manufacturing Sector Survey for 2011 showed that the manufacturing sector’s capacity utilisation, which had plumbed unprecedented depths of 10 percent in 2008, had risen to about 57,2 percent in 2011. CZI said the country’s manufacturing sector required an estimated US$2 billion to operate at full capacity.
The latest revelation from OK Zimbabwe would appear to suggest that even after improving last year, an escalating liquidity crunch on the domestic market, brought about by dollarisation of the economy in 2009, could have wreaked havoc on the sector.
Indeed financial reports for several listed manufacturing sector concerns indicates that a number of them have hemorrhaged into a going concern crisis, triggering concerns of wholesale company closures within the frail economy whose only sign of recovery is economic growth figures against increasing unemployment and abject poverty.
Interestingly, OK Zimbabwe’s results showed that while the manufacturing sector hemorrhages, the retail sector had hit a recovery path largely due to cash injections from foreign investors.
OK Zimbabwe recorded a 133 percent rise in full-year earnings for the year ending March 31, 2012 as demand continued to grow.
OK Zimbabwe chief executive officer, Willard Zireva, said the results showed ‘good growth and successful consolidation of the group since the economy was dollarised”.
The retail sector, ravaged by hyper-inflation and price controls at the peak of an economic crisis in 2007 and 2008, is one of the fastest growing under the dollarised economy.
“We are happy about the achievement…we were coming from nothing,” Zireva said.
OK Zimbabwe’s basic earnings per share went up to one cent in the year to March 2012, up from 0,43 cents previously, financial statements showed on Tuesday.
Revenue increased by 60,3 percent to US$412,6 million from US$257,4 million while after-tax profit was US$10,3 million, up from US$4,3 million the previous year.
