A NUMBER of listed companies have warned of de-industrialisation due to an escalating economic crisis in the country, which has left millions jobless.Lafarge-Cement

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There are fears the hyper-inflationary crisis of the decade to 2008, which worsened in its last year before Zimbabwe adopted a hard currency regime and ditched its own currency in 2009, could pale into insignificance compared with the unfolding economic crisis.

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Industrial capacity utilisation ranged between zero and 10 percent between 2008 and early 2009, before climbing to 57 percent in 2011, and declining to 36 percent last year.

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Financial results released for the year to December 31, 2014 pointed to sharp fall in capacity utilization, but analysts said what made the situation dire was the fact that only a few companies remain operational.
\nManufacturing firms say they are grappling with the same macro-economic fundamentals that sparked capital flight and de-industrialisation in the past 15 years, with no signs that authorities are taking the impending calamity seriously.

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“The liquidity constraints and the low average capacity utilisation, which was reported at 36,3 percent compared to 39,6 percent for 2013, continued to have an adverse impact on business activities,” said the listed cement producer, Lafarge Cement Zimbabwe Limited.

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Revenues at the country’s second largest cement producer slid to US$60,4 million during the review period, from US$67,6 million in 2013, tracking softening demand triggered by individuals and institutions deferring construction projects as a result of tight liquidity.

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Job losses have also hammered disposable incomes.

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Pre-tax profit at Lafarge fell sharply to US$357 795 during the review period, from US$5,1 million in 2013.
\nIndustries have also been affected by frequent power outages and retreating commodity prices.

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“The operating environment remained constrained by poor funding of infrastructure projects, declining aggregate demand and liquidity challenges among other factors,” said the diversified Radar, which saw turnover decline by 18 percent to US$3,7 million during the review period.