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Zambia’s textile sector reeling under high import costs

Ajit Desai, Managing Director, Kariba Textiles said that due to the rise in cost of imported raw materials as a result of continued depreciation of the Kwacha, textiles manufacturing companies are becoming expensive to operate in Zambia.

The materials required to manufacture blankets, he said, which are acrylic yarn and fibre, are not manufactured locally, which makes production of blankets costly in Zambia. He also urged other investors recently, to consider yarn manufacturing, especially since many farmers grow cotton, in turn helping to reduce the cost of producing blankets.

Only one textile company is operating in the country for some time, he added, as investors are scared to explore the textile sector as it is expensive to import raw materials and the Kwacha is not competing favourably against other major currencies. Desai said that because the blankets are sold in the local unit yet the raw materials are bought in foreign currency, the weakened Kwacha was affecting the operations.

Desai further stated that they import the raw materials on credit, which are quoted in foreign currencies, and after the blankets are manufactured, they are sold in Kwacha. However, the challenge is, paying back for the raw materials to the supplier because of the continued instability of the Kwacha. This has a negative impact on the business as prices can’t be increased unexpectedly, he said.

He further urged the government to consider buying blankets from local firms as a way of supporting the manufacturing industry, through its various departments such as hospitals and prisons. Dismas Chapula, economist, Ministry of Commerce, Trade and Industry economist for industry monitoring said that the government was committed to supporting textile industries because of its potential to create employment.

 
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