Dunlop Zimbabwe extends shut-down due to inputs crisis

Dunlop Zimbabwe, which closed down routinely in December and was due to re-open on January 11, has failed to do so and says production will only resume on February 11 although it is not clear whether it would have obtained the necessary raw materials.

Dunlop Zimbabwe managing director Kennedy Mandevani said in a press statement that the company was in a limbo which he did not expect to last beyond mid February.

"We have finished stocks that we are intending to liquidate into cash so that we can purchase the required raw materials," he said.

The extension of the closedown has created uncertainty among the workforce, which returned for a few months last year when the company re-opened after nearly one year of operating at less that 10 per cent capacity.

When our reporter visited the Dunlop factory in the Donnington industrial sites in Bulawayo, dozens of workers could be seen in clusters, pondering the company’s future and wondering if they will
still be employed this year.

"The situation today is exactly like the last time they sent us off. It started off as a minor shutdown and the next thing we were off loaded onto the streets. The future will remain uncertain until we are recalled, but you can bet that it is not all of us who will be here when that happens," said Kenneth Mulenga, a product support officer with the company.

They said dozens of contract workers who were engaged at the height of business revival that followed the setting up of the current inclusive government in February last year had had their contracts cancelled.

"There are very clear indications that things are not well in the factory. We are all worried about job security and management has to come up with a clear position on whether they will be taking us back, and if not they should pay us our dues so we can leave and start job seeking again," another worker told the reporter.

A line manager confirmed that the company outlook for 2010 remains bleak despite the evident revival of the economy, particularly mining, transport and agriculture which consume most the Dunlop products.

"We are certainly down, but this is not because there is no business out there. The problem is that the local market is saturated with cheap second-hand tyre products which virtually anyone can import at sub-economic costs and sell from anywhere, on the street corners, in their homes or even under a tree," he said.

Cheap tyre imports have flooded the Zimbabwean market, with most individual and companies opting for the blossoming second-hand tyre industry where imported light commercial vehicle tyres cost as low R200 each or R800 for all four tyres.

Some of the second-hand tyres are retreads of dubious manufacturing origins, but they sell very well on the market because Zimbabweans try their best to buy cheap if they can find the options.

A single commercial light tyre from Dunlop costs between R500 and R800, which is considered very expensive at local level. Most of the cheap second-hand products are imported from as far as China and other South East Asian nations through South Africa and Botswana.

Industry and Commerce minister Welshman Ncube told our reporter that he was not aware of the crisis at Dunlop but expressed hope that it would soon come back on line.

He said the revival of the mining and agricultural sectors depended heavily on Dunlop, and as such government will not allow the company to collapse or suffer production handicaps.

"Dunlop supplies heavy duty tyres to the mining, agriculture and bulk road haulage industry. In simple terms, it is the wheels of the economy. For that reason we as government cannot and will not allow it
to collapse.

"I am confident that management there is on top of the situation and they should keep government informed on the problems that threaten production," Ncube said.

Dunlop Zimbabwe has over the years received several subsidisation packages for the procurement of raw material and oil which it consumes in large quantities in its industrial processes.

By the end of last year, the company was rated among those that had increased production capacity utilisation from below 10 per cent to over 35 per cent.