Forex auction magnifies URL operations
BULAWAYO-based agro-industrial firm, United Refineries Limited (URL), says its operational efficiency has been enhanced through improved access to forex at the official weekly Foreign Currency Exchange Auction Trading System.
The Reserve Bank of Zimbabwe (RBZ) runs the auction system, which was introduced last year in June to assist the productive sector in accessing the much-needed hard currency to procure key raw materials and equipment.
To date, more than 4 000 companies including URL, have been allotted forex totaling US$1,968 billion through the auction system.
According to a list availed by RBZ over the weekend, of companies that have received the allotments, URL has between January and August this year been allotted US$13,9 million up from US$6,9 million as at December 2020.
In an interview in Bulawayo URL chief executive officer, Busisa Moyo, who is also the ZITF Company board chair said: “Previously, we were challenged with foreign currency constraints, but now we are getting the Foreign currency.
“Remember, when we get the foreign currency, we convert raw materials into finished products.”
Moyo said the local market was consuming products that URL was producing and thus the economy and downstream industries in the value chain were benefiting.
URL produces a wide range of products among them cooking oil, bath and laundry soap, mealie meal and stockfeed for livestock.
“We pray that the auction system continues but there are other measures that we are aware of that Government is working on to ensure that capacity utilisation in the manufacturing sector goes higher and higher,” he said.
“As you know, the Confederation of Zimbabwe Industries (CZI) is targeting 61 percent capacity utilisation, our sector at the moment is between 40 and 50 percent.
“We would like to see that 61 percent target achieved and we also would like to see going beyond that into exports,” said Moyo.
Overall, Zimbabwean export receipts for the first eight months of the year clocked US$5,09 billion against US$3,85 billion received in the corresponding period last year.
Moyo said an export-led economy would be good for the country at large as it fosters industrialisation and employment creation.
“We are happy with the direction that we are taking. We would like to see continued sustainability for stability and for expansion, which will require conversation and planning because we don’t want to stay where we are,” he said.
“We want to expand so that we can export into the region and other places.”
Being an agro-industrial company, Moyo said farmers were critical to URL operations and hence the firm has engaged players in the agriculture under a soyabean out grower’s alliance.
This year the manufacturing concern would be engaging farmers directly and enlisting and screening them for a minimum 20-hectare soyabean out grower’s alliance programme.
The agro-processor is also working with local financial institutions such as CBZ and Agricultural Finance Company (AFC), formerly Agribank to unlock funding for its contract schemes.
Meanwhile, the Reserve Bank has said it upholds the measures pronounced in the MidTerm Monetary Policy Statement in relation to clearing the foreign exchange allotment backlog of around US$175 million.
Against this background, the monetary authority has assured companies transacting at the auction system that the backlog would have been cleared by the end of this month.-eBusiness Weekly
