CCPC urges mine suppliers to set up manufacturing plants

CCPC urges mine suppliers to set up manufacturing plants
By Edwin Mbulo in Livingstone
Sat 04 Feb. 2012, 12:00 CAT

MINES will always favour importing from the original equipment manufacturers because of the low cost as long as Zambians do not start manufacturing their own machinery, says Chilufya Sampa.

In a press statement after conducting an inspection of mines on the Copperbelt and North Western provinces to assess the awarding of contracts in the mining sector, Sampa who is the Competition and Consumer Protection Commission executive director stated that the Zambia Association of Manufacturers and other mine suppliers need to set up manufacturing plants for some of the products being supplied to the mines.

"The commission learnt that indeed most contracts were given to foreign-owned companies and one of the major reasons for this was that Zambia did not have a large manufacturing base. Therefore, as long as Zambians do not take to manufacturing their own equipment, the mines will always favour importing from the Original Equipment Manufacturers (OEMs) because they are cheaper," Sampa stated.

The commission after holding several meetings with different mines and suppliers noted that most mine suppliers did not have adequate capital and would usually rely on a down payment before they could supply any goods.

"In addition, it was observed that since local suppliers did not have well established distribution networks with the OEMs, they usually failed to provide goods and services in good time. In a liberal economy, you do not necessarily need to wait for government to tell you what you should do but for the private sector to recognise market niches and take advantage of such openings," Sampa stated.

And the CCPC expressed happiness that the mining companies that sought merger authorisations from the commission were complying with the law.

"For instance, among the conditions given to the mining companies were that the merged entities should honour agreements that the firms had entered into with local suppliers to the mines before the merger. It was agreed that the merged entities should take reasonable steps to ensure that jobs and investments were created by virtue of the transactions being authorised," stated Sampa.