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Harare - Nampak Zimbabwe, the Zimbabwean affiliate of Nampak [JSE:NPK], said cheap imports are affecting its sales volumes and profit margins.
Speaking at the company's annual general meeting on Wednesday, Nampak Zimbabwe CEO John Van Gend said one of the areas of most concern to their group at present is the proliferation of imported products, particularly coming out of South Africa.
Van Gend said imported products are entering the country at market penetrating prices, thus putting pressure on Nampak’s profit margins and sales volumes.
Van Gend added that the group’s major customers are also faced with liquidity challenges, resulting in weakened demand.
“We are also seeing our major customers suffering from reduced demand, which naturally has a knock-on effect for us,” he said.
Zimbabwe is a net importer of goods from South Africa, with the bulk coming at much cheaper prices than local products.
According to latest figures from the Zimbabwe Statistical Office, 43.1% of the goods imported by Zimbabwe were imported from South Africa for the 11 months to November 30 2014.
In an effort to curb the influx of cheap imports, Zimbabwe has since engaged French-based quality inspection firm Bureau Veritas.
The agreement between the Zimbabwean government and Bureau Veritas aims to curb the influx of cheap imports by way of inspections of each batch of goods entering the country.
The company’s major role will be to ensure that imports into the country conform to Zimbabwe’s standards.
The company’s representative, Arnaud de Lamotte, who was among the French delegation that “explored” Zimbabwe late January 2015, said that the Consignment Based Conformity Assessment Agreement now awaits the signature of Minister of Industry and Commerce Mike Bimha.
