Sole tyre manufacturer shuts down

By Lance Guma
10 October 2005

Foreign currency shortages have forced Dunlop Zimbabwe, the country’s sole tyre manufacturing company, to shut down operations. Its 820 workers will lose their jobs with a further 30 000 workers in downstream industries also facing an uncertain future. Officials at the company say they have not received any foreign currency allocations from the Reserve Bank since July 15, 2005.This has meant the company is unable to procure raw materials.

While most exporting firms surrender 50 percent of their foreign currency proceeds Dunlop had to give up 100 percent of their proceeds. The company surrendered US$687 000, its average monthly export earnings, to the central bank but they have not been getting any allocations in return when they want to make import purchases.

Victor Moyo, an employee with the company, says the mood at the company premises is downbeat with workers milling around hoping for some positive news. He says rumours are rife the company will force their workers onto unpaid leave pending a resolution of the matter with government. Moyo is amazed the company should be forced to shut down just when Central bank Governor Gideon Gono paid them a visit a few weeks back and assured them of their continued support.

The irony of the situation is that the bulk of orders for tyres placed with the company come from government departments. The army, police, and Central Mechanical Department have huge orders with Dunlop. The company needs US$50,000 a day to produce tyres whereas it would cost US$100,000 a day to import them. The Reserve Bank has so far ignored the company’s cry for help.