A FOREIGN investor is considering pulling out of the
country after its proposed US$2 million diaper manufacturing project in
Bulawayo stalled due to a shortage of foreign currency to import raw materials.
In an interview, Masters Diapers Zimbabwe director Mr Nigam
Desai, whose project is the first of its kind in the city, said their investor,
a Mauritian company, which is registered in South Africa, has given them 30
days up to May 21, 2019 to show progression of the project.
“Recently, we had a meeting with our investors and they
expressed concerns on the delay of this project going ahead. It’s now almost
one year and they have been very patient but they have now come to the point
where they’re considering withdrawing the investment from Zimbabwe,” he said.
“This is due to the fact that the machines have been here
in the country for almost a year, the concerns are that the machines are
sitting idle, gathering dust and rusting and the technology has been
compromised.
“You can’t allow the machinery to sit like this for too
long, it’s not generating any income and maybe in two-three years time, the
machines will become obsolete because the technology is moving at such a fast
pace.”
The foreign investor bought the equipment for Masters
Diapers Zimbabwe with the hope that the local company would source its own
income or foreign currency to secure raw materials for the project to take off.
The diaper manufacturing business was expected to kick off
between November and December last year but still hangs in the balance as
Masters Diapers Zimbabwe is yet to secure an undisclosed amount of foreign
currency allocation from the Reserve Bank of Zimbabwe (RBZ).
“As such, they (investors) do not see solid direction in
Zimbabwe, all they got are promises of various Government officials,” Mr Desai
said, adding that RBZ Governor Dr John Mangudya had assured them of forex
allocation.
“How can we ask our investors to wait? Recently, they gave
us 30 days that if nothing solid comes up, then the machines will be
repatriated back to where they came from and this is a sad situation and we
have tried everything and we don’t know what to do.”
Glue, palp and tapes are some of the raw materials that
would be imported from around the world from countries such as China, America,
India and Singapore.
Masters Diapers Zimbabwe said in the past it made several
contact attempts through its banks directly with the Central Bank and Dr
Mangudya had assured the company in November last year that funds would be
availed for the project. Comment could not be obtained from Dr Mangudya
yesterday as his mobile phone was not being answered.
“We recently met the Permanent Secretary in the Ministry of
Industry and Commerce (Dr Mavis Sibanda) and she was delighted with this
project being one of the first projects being put in Bulawayo and was saddened
by the fact that if things don’t work out investment will be withdrawn.
“She could not believe the project has taken over a year
and nothing has happened and she did say that she will try her best to look
into it and see what she can do for us,” Mr Desai said.
“So, we have now come to a grinding halt, staff have been
trained for four months and all that money is going to the waste, monies have
been put into revamping this whole premise. The whole project is going to fail
and this is not a good picture for foreign investors that want to come here and
invest in Zimbabwe.”
It was hoped that once the plant starts producing, Masters
Diapers Zimbabwe would export 60 to 70 percent of its product to countries like
Zambia, Malawi, Mozambique and the Democratic Republic of Congo.
The country’s trade promotion and export development body,
ZimTrade, has already done a market research for the foreign market with
indications of a readily available market.
At present, Zimbabwe is spending between US$15 million and
US$18 million annually importing diapers. It is hoped that if Masters Diapers
Zimbabwe is to enter into the export market, this could go a long way in
generating foreign currency as well as reducing the country’s trade deficit. Chronicle
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