Deven Engineering hits turbulent waters

Published: 29 September 2017

Local bus manufacturing and assembling firm, Deven Engineering, has seen production severely hit as the company struggles to import critical materials owing to foreign currency challenges. The situation has seen the company shifting to the use of locally available materials and initiatives just to remain in business.

Part of the initiatives include refurbishment of second-hand buses for re-sale in the market. This is despite the fact that the Industrial Development Corporation's subsidiary last year had predicted an improvement to 70 percent capacity utilisation by 2018. Deven Engineering managing director Mr Patrick Munyaradzi, told the Herald Business that the company is literally not producing compared to the past due to failure to procure critical raw materials among other market challenges.

"The demand of buses is still massive on the local market but the challenge is sometimes you are paid by the client and then fail to procure the kits, which will not be good. Production at the moment is literally down and we are only focusing on locally available initiatives to make sure we keep moving. We are currently doing some refurbishments to old buses and mini-buses just to make them new and re-sell. At the moment we have finished one mini-bus under the initiative," said Mr Munyaradzi.

He said the bus assembly business also requires a lot of steel and sometimes prices obtained on the market has had an effect on the final pricing of the products. Mr Munyaradzi further said Government is working on modalities around the recapitalisation of the company, which will also entail ring fencing of the company's activities.

"As a company, at the moment we need some ring fencing in some of our activities. Our balance sheet also has to be sanitised as well," he said.

Deven is a subsidiary of IDC and its line of business is the construction and refurbishment of bus bodies. It also constructs car bodies under the ISUZU franchise while refurbishment of car bodies is done on any other models in the local market.

IDC, the parent company has been luring investors for all its vehicle manufacturing and assembling business. This therefore saw the state investment vehicle reversing its decision to dispose of Deven Engineering. IDC rather signed an agreement with Yutong to start assembling buses at Deven assembly plant. IDC had its subsidiary Deven up for sale in trying to mobilise capital to effectively execute its re-defined role but that decision has since been reversed.

Willowvale Motor Industries, which is also a subsidiary of IDC recently struck an assembly partnership with Chinese BAIC Motor Corporation.
- the herald