The best Zimbabwe news site on the world wide web 
 
NEWS
FORUMS
NEWS ANALYSIS
READERS' FORUM

CARTOON

BRITISH FOREIGN OFFICE

BUSINESS

Dunlop Tyres set to re-open



RBZ blamed as Dunlop shuts down

Eddie Cross: living in a lunatic asylum

Zimbabwe dollar falls to all time low

Zimbabwe crisis to worsen - analysts

Inflation shoots up, again

Murerwa wants end to price controls

Zim inflation surges by 90 percent

Murerwa slashes ministerial budgets

Top businessman Naran dies

SA approves US$1bn credit line for Zim

RBZ devalues Zim dollar by 40 percent

Zimbabwe faces economic meltdown

Gono's economic plan crumbles as inflation shoots up

Patrick Mlambo: A 100 reasons why Gono should resign

Gono wants white farmers back

Central back chief admits failure

Gono revises inflation target 100 percent upwards

Gono's 'sleepless nights' over inflation

Gono fighting a losing battle

Gono, the Zimbabwean Napoleon

Patrick Mlambo: The small minds in charge of our economy

Chido Makunike: Overcoming the 'Messiah Complex'

Zimbabwe dollar depreciates by 4 percent

Inflation accelerates once again

Gono predicts inflation to fall to 20%

Zim fools no-one with 9% unemployment claim

Zim claims on lowered inflation unconvincing

House prices bite Zimbabwe's poor

Reserve Bannk cautions against paying ex-political prisoners

$200bln windfall for ex-political prisoners

Zimbabwe's inflation seen dipping to 160%

By Alison Musekwa

DUNLOP Tyres -- Zimbabwe’s sole tyre manufacturing firm -- could soon reopen following the intervention of Industry and International Trade Minister, Obert Mpofu.

Dunlop shut down three weeks ago and sent its 820 workers home after the Reserve Bank of Zimbabwe failed to pay the firm its foreign currency allocations under an exclusive agreement.

The government is now expected to pump up US$350 000 into Dunlop towards imports for raw materials. It is envisaged that Dunlop will have a three-day working week until foreign currency inflows normalise.

"The government injected US$350 000 into Dunlop last week to provide temporary relief to the company while the RBZ is working on a more substantial foreign currency allocation to enable normal operations," Mpofu told state media.

Last Thursday, RBZ governor Gideon Gono observed Dunlop's stategic importance to the economy. It is believed that imported tyres cost four times more than the price of locally-produced tyres.

Phil Whitehead, Dunlop's managing director said the company has not been receiving foreign currency allocations from the RBZ since July 15, 2005.

The RBZ, under whose regulations all Zimbabwean exporting firms surrender 50 percent of their export proceeds, is also responsible for allocating foreign currency to industry as well as various arms of government.

“We stopped production and workers are at home. This is a huge disaster. You can not run an economy without tyres,” Whitehead said in a recent interview with New Zimbabwe.com.

Zimbabwe, whose gross domestic product (GDP) is expected to plummet by a further 7 percent in 2005, is grappling with severe foreign currency shortages as well as bitter food, fuel and electricity shortage.

The closure is also going to hit hard various arms of government such as the Zimbabwe National Army (ZNA), Zimbabwe Republic Police (ZRP) as well as the Central Mechanical and Equipment Department (CMED), which had placed huge orders of tyres to Dunlop.

Whitehead said his firm’s plight has been worsened by an exclusive arrangement entered between Dunlop and RBZ where the tyre manufacturer undertook to surrender 100 percent of its export proceeds.

Whitehead said Dunlop last month surrendered US$687 000, its average monthly export earnings, to the central bank.

“We honoured our part of the agreement with the RBZ but they are reneging. They are using the money for food and fuel imports at our expense,” Whitehead fumed.

Dunlop requires US$50 000 to manufacture tyres on a daily basis but Whitehead said it would cost US$100 000 to import the same tyres.

Whitehead the effects of Dunlop closing down are even worse off on the downstream industry and their customers.

“The army, police, CMED and Willowvale motor industry are some of our biggest customers and imagine the army and police operating with no tyres,” Whitehead said.
JOIN THE DEBATE ON THIS ARTICLE ON THE NEWZIMBABWE.COM FORUMS

newsdesk@newzimbabwe.com


All material copyright newzimbabwe.com
Material may be published or reproduced in any form with appropriate credit to this website