Zimbabwe: Newsprint shortage hits newspaper industry

The move had serious ramifications in the industry as most mainstream newspapers began producing very thin editions since Friday, a move likely to hurt their bottom line significantly due to limited space for advertisements, the single major revenue source for domestic newspapers.

Sources said the decision by the Mutare Board and Paper Mills (MBPM), a subsidiary of the Zimbabwe Stock Exchange listed Art Holdings, had caught publishers unaware as most had little stock.

Industry players said hardest hit was the Zimbabwe Newspapers Group (Zimpapers), whose daily newspapers - The Chronicle and The Herald - had already started publishing as little as four eight-page editions.

A notice sent by the group, which also publishes magazines, three major English weekly newspapers and two vernacular weekly titles, said management was making “strenuous efforts…to source alternative supplies.”

“We have to stretch the small stock on hand. This has forced us to cut the size of newspapers drastically,” the notice, issued on Saturday, October 18, 2008, said.

A marketing executive said advertisers were expecting explanations this week for booked advertisements that had failed to make it into the newspapers.

He said it had been impossible for local newspapers to build stocks from local supplies because MBPM had long reduced production and the escalating cost of newsprint was also too high for newspapers to build reserves.

In its financial statement for the half-year to March 31, 2008, Art Holdings said its earnings had been “significantly diluted by poor performance of the newsprint manufacturer, Mutare Board and Paper Mills, which recorded a loss of Z$27.5 trillion.” Consequently, capacity utilisation at the newspaper mills had been reduced to 42% because of power outages and coal shortages at the mills.

“Increased finance charges were recorded during the period due to the high debt levels required to fund losses at Mutare Board and Paper Mills. The paper mills performance in the period was disappointing. Significant production time was lost to power outages, imported raw material and coal shortages. The low production volumes and unviable newsprint prices contributed to the losses recorded at Mutare Board and Paper Mills, introducing a significant strain on funding of the business,” group chairman Passmore Matupire, had said.

It was not clear if the “technical problems” that resulted in the current closure of plants was related to the financial woes.