UN commission for Africa commends Zimbabwe industrial policy

THE United Nations Economic Commission for Africa (Uneca) has commended the Government for reviewing the Zimbabwe National Industrial Development Policy (ZNIDP), saying this will aid in aligning it to the regional policies and bring competitiveness which will assist in penetrating and promoting regional value chains.

The ZNIDP is the principal policy that drives the industrialisation agenda of a country.

The 2024-2030 policy will succeed the currently-running industrial blueprint, which was operationalised in 2019 and reigning up to December 2023.

The 2024-2030 policy intends to facilitate growth, productivity improvement, transformation and competitiveness through accelerating investment in Zimbabwe’s industrial sector.

It aims to attain a manufacturing sector growth rate of at least two percent per annum, to grow manufacturing sector investment by three percent per annum and to increase manufactured exports by 10 percent per annum.

The policy is earmarked to increase the share of manufacturing value added (MVA) in GDP to 20 percent by 2030, while growing the share of manufacturing employment total to 20 percent by the same year.

The draft policy is informed by Vision 2030, the National Development Strategy 1 (NDS1), as well as regional and international policies on industrialisation.

Speaking at a stakeholder validation workshop on the draft ZNIDP in Bulawayo recently, Economic Commission Africa economic affairs officer Dr Oliver Maponga, standing in for UN Resident Coordinator Edward Kallon, said despite the challenges experienced during the old policy, many success stories have been noticed, which include the growth in industrial capacity utilisation.

He said distortion of the global supply chain by Covid-19, power shortages and economic challenges such as inflation affected the outcome of the policy which expires at the end of the year.

Covid-19

“We are supporting the Government to draft the ZNIDP 2024-2030. The successor policy is fully informed by experiences from the old policy in terms of what have been the challenges.

“The new policy takes on emerging issues including the national nature focusing on national development framework but also regional experiences as well, as a member of Sadc, Comesa and state member to the AfCTA, those are elements that are key as we structure the policy,” he said.

“Zimbabwe operates in a regional space where there are regional opportunities, exploitation of regional value chains for example requires us to recalibrate our policy to speak to the policies of other counties within the region,” he said.

“On the AfCTA, there has to be competitiveness, you have to produce products that are competitive, so value addition, beneficiation remain central to Zimbabwe’s industrial strategy going forward. We need to capacitate micro, small and medium enterprises to be able to compete.”

Dr Maponga said one of the major shortcomings of the current policy was the lack of an implementation framework that impacted programmes as there was no set strategy to track progress.

In remarks made on her behalf by the industrial development director in the Ministry of Industry and Commerce Mr Dayford Nhema, Permanent Secretary Dr Mavis Sibanda said the Government will continue to fund the Industrial Development Corporation of Zimbabwe (IDCZ) saying that industrial finance is a key element in the industrialization of the economy.

Dr Mavis Sibanda

The IDCZ is a strategic state entity whose role in the economy is to add value through industrial processes and capital formation (foreign direct investment) to create wealth, employment and industrial development in Zimbabwe.

Dr Sibanda said the manufacturing sector has a myriad of investment opportunities, especially in the value addition of raw materials.

“Industrial finance is a key element in the industrialisation of our economy. Government will continue to support the Industrial Development Corporation of Zimbabwe (IDCZ) in its role as a development finance institution. To complement these efforts, the ministry will also seek funding opportunities from cooperation partners,” said Dr Sibanda.

“There is a need to resuscitate closed companies or establish new ones. For instance, the country used to produce 17 million pairs of shoes a year, however, the leather sector fell into a number of challenges.

“Production has now started to increase and we are now at 1 million pairs a year. We need active participation in industry. This can be achieved by leveraging on our natural resources and strengthening our vibrant youth to be competitive and innovative in their entrepreneurial enterprises,” she said.

“Our youth should play a bigger role in employment creation and innovation by venturing into manufacturing.”

Talking about the draft ZNIDP (2024-2030) she said it will also advance the uptake of green industry initiatives that can drive sustainable economic growth and provide environmental benefits.

She said in order to successfully implement and monitor this policy, they firmly believe that a private sector-led approach is essential.

Dr Sibanda said the Government is committed to forging robust public-private partnerships that will ensure efficient implementation, rigorous monitoring, and timely evaluation of the policy’s progress and impact.

According to the Ministry of Industry and Commerce, the local industry witnessed a 56,1 percent increase in capacity utilisation in 2022 from 47 percent in 2020.

Money – Image taken from Pixabay

Shelf-space occupancy of locally-produced products also grew to over 80 percent last year from 55 percent in 2021.

Exports of manufactured products surged to US$366 million last year from US$324 million in 2021, translating to a 12, 9 percent improvement. —chronicle

Innscor sinks US$125m into expansion over 2 years
Innscor sinks US$125m into expansion over 2 years Innscor Africa said volume growth at its poultry division, Irvine’s, was concentrated in the table egg and gay-old chick categories, after growing by 14 percent and 7 percent, respectively, during the year to June 30, 2023 (File Picture)
Nelson Gahadza

Zimbabwe’s largest diversified group, Innscor Africa, says it has invested nearly US$125 million over the past two years towards the expansion of capital projects across its various business units.

Group chairman Mr Addington Chinake, commenting on the group’s financials for the year ended June 30, 2023, said the investment programme has allowed the establishment of new business units and products and enabled the expansion and modernisation of existing manufacturing lines.

He said this has also extended existing product categories and will ultimately enhance the overall manufacturing efficiencies and capabilities of the group as critical mass is reached.

“Much of this investment has recently been commissioned or is in the final stages of commissioning, and in the period ahead, we will deploy considerable focus and energy on ensuring these exciting new investments operate according to the necessary operating models, driving positive returns to shareholders,” he said.

He added that the group understands its responsibilities to the nation in providing world-class quality products at affordable prices and will continue to pursue expansion programs with this objective in mind.

Innscor is a focused group of light manufacturing businesses that, together with various strategically integrated agricultural operations, produce a number of Zimbabwe’s iconic brands in the consumer staple product space.

Mr Chinake said during the period under review, the group’s protein, stockfeeds, beverage, and light manufacturing segments delivered positive volume growth over the comparative year, while the impact of international wheat pricing carried over from the previous financial year had an adverse impact on the Mill-Bake segment.

Innscor’s investment drive underpinned the overall volume trajectory, with focus being deployed on expanding plant capacities, enhancing manufacturing capabilities, and product extensions, while route-to-market initiatives continued to be refined in order to drive volume into new markets.

From a trading perspective, Mr Chinake said the business models continue to undergo constant refinement to ensure they remain agile and relevant in a dynamic operating environment.

“It is vital that our expansion programs yield world-class quality products and that our increasing manufacturing capacities across our business units translate into economies of scale, resulting in excellent pricing for our customers,” he said.

Group revenue for the year under review grew 14,7 percent to US$804,040 million, driven by improved capacity utilization across the group’s core manufacturing businesses and further supported by the introduction of new product categories, category extensions, and route-to-market optimization strategies undertaken.

Mr Chinake said the group saw a mild contraction in margin efficiency terms of 3,7 percent, and this resulted mainly from reduced gross margin yield where the full increase in the core bills of materials could not be fully recovered in the sales price as units sought to minimize the impact of price increases on the consumer and maintain volume momentum.

In terms of the operations review, volume growth for the bakery division was muted compared to the comparative year, mainly on account of the pricing dynamics experienced early in quarter one, as inflated international wheat pricing resulted in an adverse effect on bread pricing for the consumer.

Mr Chinake said loaf volumes from quarter two through quarter four increased substantially, however, as local wheat stocks improved and international pricing softened.

The group recently completed the commissioning of its US$22 million investment into a state-of-the-art, fully automated production line in Bulawayo.

At National Foods, aggregate volumes contracted by 3 percent over the comparative period, mainly driven by the performance of the flour division. Volumes in the flour unit contracted by 12,3 percent versus the comparative year, driven largely by significant increases in the price of wheat.

“The flour division completed the installation of a new Buhler mill in Bulawayo, which will increase wheat milling capacity and operational efficiency across the division, while maize volumes declined by 9,4 percent versus the prior year.

In the protein category, at Colcom Foods, demand for fresh pork remained firm, resulting in volume growth of 8 percent, supported by double-digit growth across the sausage and polony categories over the comparative year.

Volume growth for the bacon and ham category was muted in the comparative year, reflective of the category’s reliance on the formal retail channel. At Irvine’s, volume growth was concentrated in the table egg and day-old chick categories, growing 14 percent and 7 percent, respectively, over the comparative year, while the frozen chicken category continued to operate at capacity, and volumes closed at the same level as the comparative year.

Mr Chinake said investments targeted at increasing breeder and laying capacity and hatchery extensions have been primary growth drivers, and the business looks ahead to initiating capacity enhancement investments for the frozen chicken category.

In the beverage division, Prodairy continued to register solid volume growth, with overall volumes closing 44 percent ahead of the comparative year.

The Dairy Blend category operating under the “Revive” brand benefited from prior capacity expansion investment, and volumes closed 83 percent ahead of the comparative year.

Mr Chinake said a similar growth of 73 percent over the comparative year was registered in the Steri-milk category, while the “Life” UHT milk, butter, and cream categories also delivered strong volume growth of 5 percent and 23 percent, respectively.

-herald