Textile manufacturer Mapeto DWSM has invested $35 million (K13.7 billion, at the current exchange rate) in the company which includes the state-of-the-art ginning machine installed in Salima.
However, Mapeto DWSM general manager Martin Mpata has expressed fears that the investment could be a white elephant if issues of excise duties are not addressed.
“The manufacturing industry in the country is far from developing unless the authorities put their weight into things such as the unfair excise removals, smuggling, price under declaration and other things.
“The country must also offer incentives to the manufacturing industry that will grow and export the goods to relieve the country of forex problems,” he said.
Mpata said the company has had to put on hold 300 looms meant for weaving due to the excise tax structure arguing that the removal of this tax from direct traders who import to sell is putting us on the same footing with them.
“It, therefore, does not encourage us to re–invest thereby employing more people as the operational costs incurred cannot match those of a trader. In the process, our prices will be higher than the imported fabrics, making our investment a white elephant,” he argued.
In the 2012/13 fiscal budget, government removed taxes on second hand clothes and textiles, a move which Mapeto warned could cripple the textile manufacturing industry.
The new machines erected have seen the company moving from working with two shifts to three shifts, working 24 hours a day seven days a week.
With the new investment, Mapeto DWSM will increase its production from the current 80 000 metres to 150 000 metres of cloth and gradually growing to 200 000 metres of cloth.