Packaging industry needs US$100 million makeover

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ZIMBABWE’S packaging industry, grappling with outdated equipment and fierce competition, requires a US$100 million shot in the arm to remain relevant, according to a recent report.
The industry, crucial for various sectors along the value chain, faces capacity constraints despite local producers having the potential to meet domestic demand.
The report, titled ‘Development of Local Content Thresholds for the Fertiliser, Packaging and Pharmaceutical Sectors in Zimbabwe 2023,’ estimates annual national demand for packaging products at US$46,5 million, ranging from US$30 million to US$70 million.
However, local producers currently supply only US$23,6 million, highlighting a significant gap.

The report urges immediate investment in productive capacity, particularly for paper mills and forestry companies, which supply essential raw materials.
“The private sector, especially packaging firms and banks, have a role to play in providing finance,” the report stated.
Collaboration with foreign players is also recommended.
“Stakeholders in the packaging sector outside Zimbabwe have more knowledge of sector dynamics, owing to technological developments than those within the country; therefore, local stakeholders should forge alliances with international stakeholders by investing in partnerships.”
Currently, the industry relies heavily on imported inputs, making it vulnerable to external shocks.
While local paper manufacturing is seen as a potential long-term solution, the report says a favourable policy environment is essential.
The report highlights the recent reinstatement of import license restrictions, which could stimulate domestic production growth.
To further encourage local sourcing, the report proposes tax incentives such as tax-free zones, tax relief, and tax rebates.
These measures could attract investors to establish paper mills and forestry operations, ultimately reducing import dependence, it said. newsdesk@fingaz.co.zw