As an economy, local manufacturing may not always be a solution for some products as economics of comparative advantage eventually wins. There is need to engage in deep analysis and make informed decisions about which products can be efficiently manufactured locally and which ones the country should rather rely on imports.
One current case in point of the play of economics of comparative advantage coming to weigh in is the shutdown of Eagle Glass which was aimed at reviving the nostalgic Kapiri Glass Company. The set up of this company was aimed at cutting down Glass imports and making Zambia self sufficient in glass manufacturing using locally sourced raw materials.
But Eagle glass announced that it was shutting down its local production lines earlier this year due to heavy competition from cheap imported glass. When contacted to find out the current state of affairs, Central Province Permanent Secretary – PS Bernard Chomba stated that negotiations are still underway to see if Eagle Glass manufacturing company in Kapiri Mposhi can resume operations.
He also confirmed that the manufacturing company is currently not operational as it halted production of its glass products earlier this year. Chomba said the company stopped production because imported glass is cheaper than the glass that it was manufacturing and therefore realised that it was difficult for it to survive in business.
Speaking in an exclusive interview with the Zambian Business Times-ZBT, Chomba said investigations are ongoing to find out why the company would decide to down tools until a time when business is favourable for them after investing huge sums of money into the Kapiri Mposhi based factory.
He said the company has halted production, sold off everything it had produced and has switched off its machines and glass manufacturing plant, adding that it may be trying to convince government to increase the tariffs on imported glass, so that its glass can be cheaper.
The Central Province PS stated that one possible solution might be engaging power utility ZESCO Limited to see if reducing electricity tariffs for the company would assist it in any way, but no concrete solutions have currently been agreed.
He added that the company sources its major raw materials locally which is a plus to the local economy, adding that some raw materials such as chemicals, which are in form of powder, are imported and used in the manufacturing process.
“I don’t know if they just want to make their case and convince government to start hiking the tariffs on the imported glass, so that they can have a monopoly of their products on the market, we are still investigating”, he said.
Chomba further revealed that Eagle Glass manufacturing company is the first of its kind and the company had plans to open another factory, but the current situation does not make it clear on the fate of those plans.
When contacted for a comment, Eagle Glass Managing Director Zhi Zhao confirmed to ZBT that the company is no longer in active glass production and that the company would be able to provide more information on its operations at a later stage.
