eBusiness Weekly
Kudzanai Sharara
If there is a product that you are bound to find anywhere in Zimbabwe, be it at work, at home, at church, at school in fact everywhere, then it has to be paper.
There are so many varieties of paper based products from printing and writing paper, to packaging and coated paper and many other specialty paper. But despite this seemingly widespread use across many sectors of the economy, Zimbabwe’s paper industry has no hope of manufacturing the product again.
According to industry experts, the local paper industry cannot competitively manufacturer paper products, even if it tried, as the costs are just too high while supply of raw materials is very limited. As a result the bulk of the paper used in this country is imported. The country imported paper-related products of close to $100 million between January and November 2017.
“We simply can’t do it. Major issues that will confront us in the pulp and paper manufacturing business is the high cost of production caused by high cost of raw materials as well as uneconomical plant size.
In addition, the country does not have sufficient supply of raw materials,” said Softex and National Waste Collection general manager Prosper Chijokwe.
The country boasts two big companies (Hunyani and Art) that supply paper-based products, but both are not keen to venture into primary manufacturing of paper as the margins, if any, would not make any economic sense.
However, this has not always been the case as the country used to manufacture paper with listed entity Art Corporation producing the product at its Mutare Board and Paper Mills as well as at Kadoma Paper Mills while Hunyani, a subsidiary of listed entity Nampak, used to run one of Africa’s biggest paper manufacturing plant at Hunyani Pulp & Paper Company, which had a capacity to produce 150 tonnes of paper per day. Both companies have, however, since closed with the companies resorting to importing paper for their product range, dashing hopes of any resuscitation of operations.
A source at Hunyani said the company used to produce for the export market to get the much needed foreign currency, but since dollarisation, it did not make sense as the US dollar prices were three times more than the prevailing prices, for finished product, in the region.
The plant, which was located in Norton, has since been closed and dismantled suggesting the company has no intention of putting it back to life. Hunyani is now focusing on its core business of making and supplying packaging products while importing the necessary raw materials.
One paper product with wide spread use in this country is the bond paper, but given the requirements for the primary production of the product, both Hunyani and Art Corporation have no intention of venturing into the seemingly lucrative business as the margins if any will not make any economic sense.
Art used to have a mill for manufacturing fine paper in Kadoma, but stopped manufacturing in 2008 as it could not compete.
“We used to have two mills at Kadoma, one for tissue production and the other one for fine paper including bond paper.
“What then transpired is that the machine was closed in 2008 because of issues to do with economies of scale. It (the machine) was too small to compete. It was 30 tonnes a day in terms of capacity, and at that level you won’t make any money,” said Chijokwe.
“Most of the guys who are supplying the product, from South Africa, these are guys with big machines who target the region. Essentially this is the reason why we don’t have a mill in Zambia, Malawi, Zimbabwe and even Tanzania.
“Essentially for you to make money in this kind of business you need the big machines. The technology for this kind of business is made in such a way that you need economies of scale.
“Secondly when making bond paper, you need hardwood which is chemically treated timber and here in Zimbabwe and in the region outside South Africa we don’t have such machines but in South Africa, both Sappi Limited and the Mondi Group have such machines and well advanced in terms of technology,” Chijokwe said.
He noted that: “For one to make it in this industry, there is need for backward integration and control of the whole value chain. Here in Zimbabwe our forests and plantations for hardwood and pinewood, which is also needed, are too small to sustain such operations, you will then have to import, but that will also put up the costs, so you can’t compete from a manufacturing point of view.”
“So to invest in the necessary machinery is not sustainable, our forests are too small to provide adequate supplies.”
Zimbabwe had a well-established plantation forest resource base covering some 155 853 hectares with about 90 percent of the plantations located in the eastern districts in Manicaland province, but most of the plantations were wiped off following years of continued illegal settlements in timber plantations. These illegal settlers have been illegally harvesting timber with some causing fires which have gutted thousands of hectares of standing timber.
As the plantations got gutted, so too were chances of manufacturing paper viably in this country.
