eBusiness Weekly
Oliver Kazunga
Auto TYRES Zimbabwe, formerly Dunlop Zimbabwe, says its pension fund will be dissolved at the end of the month due to viability challenges the firm has been facing over the past two years.
In 2017, the Bulawayo-based factory announced that it had acquired modern tyre-making equipment that enhances competitive production and the plant was set for re-opening last year.
On Monday, the tyre-manufacturing firm issued a notice stating that its pension fund could no longer continue due to viability challenges as was outlined in notice of retrenchment letters circulated to employees in January last year.
“In view of the above development, the board of trustees of Auto Tyres Pension Fund agreed to dissolve the pension fund effective January 31 2018 and distribute proceeds of the fund’s assets to members of the fund since the fund can no longer continue,” reads part of the notice.
In this light, Auto Tyres (Zimbabwe) pension fund was inviting all ex-members who were contributing or those that might have a claim against the fund to inspect the final valuation schedule of benefits payable and lodge their claims to the principal officer at Auto Tyres within 14 days from the date of the notice.
“This is in reference to letters circulated to employees in January 2018,” it said.
Auto Tyres Zimbabwe stopped production at the end of 2016 citing working capital and foreign currency constraints to procure critical raw materials.
In the past two years, the firm has been sourcing funding locally with a view to re-opening at the beginning of last year.
It was hoped that if it re-opens, Auto Tyres Zimbabwe would adopt a lean production model, which reduces the cost of production.
At its peak, Dunlop Zimbabwe used to employ up to 2 000 workers directly with significant impact downstream along the value chain.
Due to its closure, Zimbabwe now relies on imported tyres following the demise of local manufacturers, a development that is contributing to the country’s high import bill.
On average, the country consumes tyres worth about $150 million annually.
The tyre producer has capacity to produce 6 000 tonnes of tyres per year worth $50 million and this can be increased to its glory days of over 7 000 tonnes annually.
Many pre-owned vehicles come with worn out tyres, forcing the new owners to buy new ones, in the process putting pressure on foreign currency requirements.
