THE chairperson of one of Zimbabwe’s fastest growing paint-makers, Nash Paints last week opened up about a power crisis that has crippled operations, as he warned the firm could be forced to offload staff in drastic cost cutbacks.
Speaking exclusively to businessdigest, Tinashe Mutarisi, said the company took the bold decision to whittle down production by over half after enduring eight days of blackouts.
He said in the interest of customers and staff, Nash Paints would press ahead with production but at a much reduced scale.
Zimbabwe is soldiering through one of the toughest phases of a protracted economic crisis, with industries being grounded by up to 15 hours due to the power crisis.
This contrasts with indications by President Emmerson Mnangagwa in the run up to polls held in August that blackouts were history following massive investments at Hwange power station.
“We have had eight days without power right now and it's scary,” Mutarisi told businessdigest.
“We have never faced such a challenge since we started. We were dealing directly with Zesa (power utility firm Zimbabwe Electricity Suppy Authority Holdings).
“Within those eight days, electricity (briefly returned), then we switched on our machines. While we were doing that, power went off within an hour.
- Mr President, you missed the opportunity to be the veritable voice of conscience
- ED to commission new-look border post
- Zanu PF ready for congress
- EU slams Zim over delayed reforms
Keep Reading
“When we asked why, they said they noticed a fault.
“We have been dealing with Zesa for now and have not thought about engaging the government. We have about 30 tanks (paint manufacturing tanks) but now we want to use four,” Mutarisi added.
He said while “we see that using fuel to power those tanks will eat into profit, at the very same time, it will service our customers for now until electricity comes.
“The (power) generators that are needed here are those massive industrial scale ones akin to a power station. What we have done is to try and (install a solar) facility because we found it was better and much cheaper,” Mutarisi said.
“For solar, we were quoted about US$700 000 to build something that will be able to pick up the entire plant.
“However, the problem is that, of late, banks are not giving out loans and we are only able to have enough money to (work) hand to mouth. So there is very little we can do. But it is something that we are looking at.
“Right now, we want to separate our machines. We don’t want to look for a generator that can pick up the whole plant because we already have a big generator for the whole plant in Chitungwiza, the one used at our factory for Nash Furnitures.”
Zimbabwe’s banks have held back on fresh lending in the past few months, cautious the tenure of the multicurrency system will come to an end in 2025. After that, loan repayments from borrowers would be in the free falling domestic unity, they fear. However, government last week announced the extension of the multicur-rency system to 2030.
But market watchers were cautious this week that banks may hold back on lending for some time.
The firm recently held a meeting with regional managers and factory staff, where Mutarisi gave details of the problems they are facing.
Insiders said following the meeting, employees offered to work part-time to reduce the labour cost.
Challenges faced by the company come amid a drop in generation from the country’s two main sources, the Kariba South Hydro Power Station and Hwange Thermal Power Station.
This has left many businesses on the brink of collapse, captains of industry said this week.
As of Friday last week, the country was generating about 1 040 megawatts (MW), according to the Zimbabwe Power Company, Zesa Holdings’ subsidiary responsible for power generation.
This is against a national demand of about 2 000MW.
Confederation of Zimbabwe Industries president Kurai Matsheza said recently that the intermittent supply of electricity has had a telling effect on operations.
“If we are to deliver an upper middle-income industry and economy, we need to collaborate with the energy sector and quantify what energy we will need to power that industrialisation,” he said.
“We could create policies that would make it easier for companies to install solar by providing some incentives if we can. We could also accelerate domestic solar use so that current grid consumption from domestic users can be released for industrial use.
“We could liberalise the energy sector some more so that we do not cripple industry. We should not solve exchange rate management issues by raising tariffs to levels that are uncompetitive for industry. Let us address the currency challenges,” Matsheza said.
