Zimbabwe’s biggest leather tannery, Wetblue Industries, has resumed operations at 10 percent capacity use after shutting down over a year ago.
The tannery, a subsidiary of the defunct Cold Storage Company (CSC) was placed under provisional judicial management in 2014 following a debt overhang of $1.5 million. In an interview with Business Weekly, Wetblue Industries judicial manager Crispen Mwete said the tannery opened three months ago.
“We have resumed operations but on a very small-scale with capacity utilisation of about 10 percent. Our desire is to have more business in the form of hides coming for processing.
Although we require working capital, that is not our biggest concern as we only need a very small amount of money to revive operations to competitive levels,” he said without divulging the figure. In 2014, Government banned exports of raw hides. Since then concerns have been raised over increasing stockpiles with hide collectors and abattoirs blamed for hoarding the hides for speculative purposes.
An official with the Ministry of Industry and Commerce who could not be named for professional reasons said yesterday that the Government was still not allowing the exportation of raw hides. With capacity utilisation of 10 percent, Mwete said the leather processor was realising between $6 000 and $8 000 in revenue monthly.
“Should funding come in, we would be able to improve our capacity utilisation to competitive levels. At present we are generating between $6 000 and $8 000 in revenue per month and at peak levels Wetblue Industries used to generate over $50 000 per month,” he said.
The decline in the slaughter rate at CSC’s five abattoirs dotted across the country for close to two decades culminated in lower uptake of hides by Wetblue Industries. At some stage, CSC introduced a hides buying scheme with a view to save the tannery from collapse but the strategy failed to yield tangible results. This was because the meat processor and marketer faced financial challenges to buy the hides from communal farmers leading to closure of Wetblue Industries in 2009.
Given the necessary support, Wetblue Industries has the capacity to tan 1 200 to 1 500 hides a day when operating at full throttle.
“The market is slowly bringing hides for Wetblue and if somebody brings his or her hides and chemicals, we charge $0,27 per kilogramme excluding Value Added Tax and $1,60 per kg where we provide everything including chemicals,” said Mwete.
Presently, Wetblue Industries is not importing the chemicals it uses for its operations but procures them from local suppliers who would have probably imported them.
At its peak the leather processor earned Zimbabwe significant amount of foreign currency through exporting to Europe between 18 and 25 tonnes of leather per month. It used to employ over 150 workers but the figure has gone down to about 33.