US embassy cable - 05HARARE125

C O N F I D E N T I A L HARARE 000125 
 
SIPDIS 
 
STATE FOR AF/S 
USDOC FOR ROBERT TELCHIN 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E.O. 12958: DECL: 12/13/2014 
TAGS: EAGR, PGOV, EFIN, ECON, ETRD, EINV, ZI, Economic Situation 
SUBJECT: BIG MANUFACTURER HALTS U.S. FURNITURE EXPORTS 
 
 
Classified By: Classified by Ambassador Christopher Dell 
under Section 1.4 e/g 
 
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Summary 
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1. (C) Once Zimbabwe's largest exporter to the U.S., local 
furniture manufacturer Wilson International's head recently 
told Econoff that he now considers his firm uncompetitive in 
the U.S. market. Due to an overvalued zimdollar and the 
GOZ,s revocation of export incentives, Wilson currently 
ships only up-market billiard tables to North America. 
 
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No point in exporting at this exchange rate 
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2. (C) In the early 2000s, Wilson International Managing 
Director Jim Wilson said his firm furnished 1,300 rooms for 
Disney's Animal Kingdom and filled a large order for Drexel 
Heritage.  These contracts, plus the billiard table business, 
made Wilson International Zimbabwe's largest exporter to the 
U.S. in 2002.  However, Wilson said he no longer believes his 
family-run business (850 employees) can compete in the 
ultra-competitive U.S. furniture market while converting 
revenue at the official Z$ 5,800:US$ exchange rate.  Wilson 
told us his labor, raw materials, property taxes and 
utilities expenses rose on average by 300-400 percent in 
2004, yet the exchange rate appreciated from Z$6,500 to 
5,600:US$. 
 
3. (C) Wilson said Disney has asked him to bid on a new 
1,600-room hotel project, but without a devaluation his firm 
simply cannot compete against Chinese producers.  He 
expressed hope that Reserve Bank Governor Gideon Gono would 
devalue the zimdollar after March's parliamentary elections. 
However, Wilson noted that Gono has rescinded tax advantages 
for locally-owned companies like Wilson International that 
operate from Export Processing Zones, depriving exporters of 
a key incentive. 
 
4. (C) On a positive note, Wilson said he was especially 
pleased that the educational television series, "World's 
Best," just selected his high-end billiard tables, marketed 
in the U.S. through Presidential Billiards 
(presidentialbilliards.com), as the highest quality anywhere. 
 The television show will send a film crew to Zimbabwe in 
February to tape Wilson's production process. 
 
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Comment 
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5. (C) If the GOZ does not devalue its currency, or better 
yet return to a float, we have no doubt manufacturers like 
Wilson International will eventually shift operations 
elsewhere.  Wilson admitted that he has been considering 
relocating production facilities to neighboring Zambia. 
DELL