Irvine’s requires US$45 million monthly
IRVINE’S Zimbabwe says it has a monthly foreign currency requirement of at least US$45 million for working capital and importation of stockfeed raw materials.
David Irvine, the company’s chief executive, said during a tour of the company that the firm is currently importing over 90 percent of maize and soyabeans which are key raw materials for feedstock production.
“We are struggling to bring in soya and maize which we are importing, but we have been able to maintain feedstock production at between 8 000 and 10 000 tonnes per month. Therefore, to maintain the production level, we require a lot of foreign currency,” he said.
Irvine said delays in the processing of permits at the border were threatening the company’s production. In addition to that, he said in order to meet its foreign currency needs, the company should be allowed to retain 100 percent of its export receipts.
“It is affecting us in that we lose 20 percent of our export earnings. Our export earnings would probably be in the region of US$4,8 million. Last year, I am not exactly sure, but it was about US$1 million, so we have gone up a lot and we are going to continue to push those sales. To be able to do it, I am going to need more inputs, stockfeed ingredients, vitamins and that kind of thing,” he said.
He added that the company also needs money for the genetics. “I have given a guarantee to the Reserve Bank of Zimbabwe that any extra money that we get from the export retention we are going to put in this firm in new technology to increase our egg production.”
Currently the group exports account for 10 percent of its overall sales, but is looking to grow the threshold.
Irvine said the proposed tax on export proceeds would significantly hamper their ability to import critical raw materials.
“We are told that we are going to have to pay the tax on exports in foreign currency. I am not quite sure how that is going to work. It hasn’t been implemented yet, but we are told it is going to be implemented. In other words, if I export US$1 million, they are going to say the tax on that is 10 percent, US$100 000 in foreign exchange,” he said.
“If we do that is straight madness. You cannot tax exports. We have got to do more exports in this country, don’t tax it. Give people tax holidays for doing it, do it the other way,” he added.
Industry and Commerce minister Sekai Nzenza said the government was committed to improving the ease of doing business, in particular, would look at the delays at the borders.