Zambia Metal Fabricators Limited (ZAMEFA) has engaged in talks with government and the Bank of Zambia (BOZ) for the possible removal of Statutory Instrument number 55 saying it was negatively impacting the country’s manufacturing industry and posing a threat on the export business.
And ZAMEFA says it was pursuing the European Aluminium industry through its mother company General Cable for the potential setting up of an Aluminium plant in the country.
Company Secretary, Stephen Sikombe said setting up an aluminium base in the country would lead to reduced cost of production of cables which will result in reduced market prices.
"It would be good to put up a plant in the country especially here in Luanshya, as we are the largest metal fabricators and copper value adder in the country. We use aluminium in our daily production of ZESCO overhead cables, underground cables for the mines but we always have to import the product which is expensive and is posing a challenge on us," Sikombe said.
He was speaking today when Luanshya District Commissioner, Harold Mbaulu undertook a familiarization tour of the metal plant.
He said currently two representatives coming from Chzech Republic and the United Arab Emirates were in the country to survey and market their product.
Mr Sikombe noted that opening up an aluminium plant will also contribute to economic growth as well as supplement government efforts in job creation.
The ZAMEFA Company Secretary also said his company was upholding the government policy on employing local labour as his company holds 346 Zambian employees out of the 350 total work force.
And ZAMEFA Operations Consultant, Onesmus Ngonomo said the company was in consultation with government and BOZ for the possible removal of SI 55 which was currently disadvantaging the manufacturing industry in the country.
Mr Ngonomo said though the Statutory Instrument No. 55 was well intended, it was disadvantaging the large scale manufacturers as it was increasing the export sale price and disadvantaging the company on the international market.
He emphasized the need to remove Statutory Instrument No. 55 or consider streamlining the statutory instrument to include exception or increasing the threshold for large scale suppliers.
"Much as the private sector were in support of the objectives and intention of the Statutory Instrument, if not amended will result in the loss of export business which accounts for more than 80% of the company’s revenue which stands as one of the largest tax payers in the country," Ngonomo said.
He said ZAMEFA’s export rate was currently valued at over K26 million per month and that it was excessive for the company to have to declare letters of credit for every $200 000 sale.
SI 55 requires customers buying goods worth more than $200,000 from Zambia to use Letters of Credit which translates to customers paying the banks ranging from 0.5% to 1.5% of the value of their purchase.
Meanwhile, Mr Ngomono has appealed to government to intervene in the standard of copper cathodes being produced by Luanshya Copper mines to benefit the local market.
He observed that the standard of copper cathodes that Luanshya Copper mines was producing did not meet the international specifications required for the production of cables and copper rods.
Mr Ngonomo said the copper cathodes which were only being exported contained a large number of base metals such as cobalt among others which were evading tax resulting in loss of revenue.
"We have to buy our copper cathodes from Mopani and Konkola Copper mine as Luanshya Copper mines is producing copper cathodes in row form, it is not benefiting the nation as it is escaping value addition and it is not even listed on the London Metal Exchange," he said.
And Luanshya District Commissioner, Harold Mbaulu reiterated government’s commitment to help facilitate the growing of the private sector.
Mr Mbaulu said government policies were meant to create a platform for the private sector to flourish, saying it would be distressed to see cooperate entities stifled.
The District Commissioner who was in the company of the District Administrative Officer, Michael Tandeo also took timed to interact with employees in the various company departments he toured.