Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Leather sector seeks $100m bailout

Leather sector seeks $100m bailout


Zimbabwe’s leather industry wants to negotiate for a $100 million financial rescue package from the Reserve Bank of Zimbabwe and developmental partners to revive the once thriving sector, an official has said.


In an interview with NewsDay on the sidelines of the just-ended Leather Institute of Zimbabwe (LIZ) financial workshop held in Bulawayo, LIZ board chairman, Cornelio Sunduza said the leather industry was almost grounded, with the majority of the factories operating at between 2% to 5%.

“So, literally, we are almost at a standstill. What we need to do is that, through this initiative, we want to negotiate a financial package for reviving the leather sector,” he said.

Probed on how much they were looking for, Sunduza said: “For the sector to be revived, we need something like $100 million. We will approach the Reserve Bank of Zimbabwe and our developmental partners like the United Nations Industrial Development Organisation (Unido).”

He said Unido have in the past given them equipment, which they would pay for over 10 years.

“That’s the sort of thing we are looking at. Then we could approach organisations like Homelink and other institutions for working capital. We would also want to talk to the Zimbabwe Asset Management Corporation to restructure the existing debt because some of the people are borrowed and there is need for us to restructure that for people to have motivation for reviving the industry,” Sunduza said.

He said the leather industry collapsed due to lack of expertise, among other challenges.

“The majority of the people were not the owners of the existing industries and when there was an initiative for involving the majority of local people, you will find that some of the companies, for instance G&D was initially taken up by Philip Chiyangwa. He didn’t have a lot of expertise. So that’s one of the biggest challenges, the issue of expertise,” Sunduza said.

He applauded the government for earmarking Bulawayo as a special economic zone (SEZ) for leather.

“It is a good initiative, the factories we are talking about, the structures and the knowledge of export still exist….When we had an economic meltdown…, the market just froze,” Sunduza said.

“With the SEZ we are literally exposing the industry to the Southern African Development Community (Sadc). Sadc has got about 300 million people and the Common Market for Eastern and Southern Africa (Comesa) has about 600 million and in terms of balance of trade, Sadc has a huge balance of trade in terms of imports of shoes that are coming into Sadc from outside Africa. The same applies to Comesa. So we are positioned to be able to supply those shoes and leather products into the Comesa and Sadc regions for far much less if we play our cards right.”

He said under the SEZ initiative, existing industries should be given first preference.

“We need to look at those who can produce results first. We need to look at factories that already have existing infrastructure that will not take us too long to set up because to set up a business and systems, develop the product, train the people may take longer whereas the infrastructure that exists what we need to do is to say let’s quickly start them especially tanneries..,” Sunduza said.

At its peak, the leather industry employed more than 25 000 people.


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