ZIMBABWE’s remaining blanket manufacturer, Waverly Blankets, faces collapse as its operations are being suffocated by an influx of smuggled blankets allegedly from China. It is understood that once the blankets leave China, they are taken to South Africa before being smuggled into Zimbabwe where they are sold at a massive discount.
Consequently, Waverly Blankets is currently operating at 35 percent capacity.
Waverly Blankets’ administration manager, Doreen Eeson, said truckloads of cheap smuggled blankets were finding their way onto the local market at an alarming rate.
The influx of smuggled blankets has already claimed the scalp of one of Bulawayo’s most iconic blanket makers, National Blankets, which collapsed due to viability challenges, amid growing liabilities while the firm’s blankets failed to command a market.
Waverly Blankets says it incurs huge costs when importing raw materials such as yarn, chemicals and dyes used to manufacture blankets
The costs make it difficult for the company to compete with the lowly priced smuggled goods, which, surprisingly, are being imported duty-free.
“It (smuggling) is killing our business. Right now, at Waverly Blankets, we could employ over 2 000 people, but we are at 1 200. The winter season this year, which is our peak period, was not as well as we thought it was going to be,” said Ms Eeson last week in an interview with The Herald Business during the Confederation of Zimbabwe Industries (CZI) workshop on smuggling and border management.
The situation faced by Waverly Blankets is the same across a number of sector in the country including the tyre industry.
Waverly Blankets has tried without success to work with regulators such as Zimbabwe Revenue Authority (Zimra).
“The question now is; ‘are we all going to be there (keep our jobs)? Are contract workers going to be terminated because of smuggled blankets?
“The whole idea we worked with Zimra was to resuscitate the industry and create employment,” said Ms Eeson.
Ms Eeson said the company has taken the issue up with relevant authorities, but no action was taken against the culprits.
It is believed that when smugglers are intercepted, they are asked to pay import duty while in some cases they get away by paying bribes.
Zimra may forfeit goods when one contravenes provisions of the Customs and Exercise Act and release them when one makes representations within 60 days.
The law allows the Zimra Commissioner-General to release the seized goods without formality or upon the payment of the relevant duties due, plus a fine and storage charges.
Said Ms Eeson: “Right now, Zimbabwe is full of smuggled blankets. A lot of blankets are coming from China through South Africa. Buses are coming full of blankets; vehicles are coming full of blankets.
“As Waverly Blankets did not go in as whistle-blowers to say to Zimra, ‘if you collect $500 000 you owe us $5000, no’. We worked with Zimra for the good of the economy. It was not just blankets we targeted, but other products; we tipped Zimra off.”
SOURCE: THE HERALD