Last surviving EPZ company announces closure in Walvis Bay

Namibia Press & Tool Company, the last surviving Export Processing Zone (EPZ) company in Walvis Bay, will close down at the end of the year.

Two well-informed sources confirmed this to Namib Times this week, adding the company opts to relocate to another country, as Namibia’s current EPZ tax-regime comes to an end in 2025.
“As an EPZ company we don’t pay import or export duties, neither income tax. However, the uncertainty around what to expect beyond 2025 makes it more viable to rather act now, and relocate operations to another country to keep certainty in the equation”, the newspaper was told.
Negotiations are currently underway with the workers and their trade union regarding retrenchments, one of the sources also con-firmed.
“We are looking at concluding our operations in Walvis Bay by the end of 2021, which include servicing a con-tract of one of our customers which we hope will be renewed soon”, the source concluded.
Namibia adopted the Export Processing Zone (EPZ) concept the mid-1990’s to lure international manufacturers to the country. The manufacturer sets up a factory and pays no import duties on raw materials and no export tariffs on exports.
The key principle was to create jobs, bring technology to the country and create local expertise. Although no import- or export tariffs were payable, the exports and imports of EPZ companies were added to Namibia’s balance of payments.
When Walvis Bay established its EPZ zone in 1996, investors also paid lower prices for land to develop the factories. The concept was successful and eight EPZ companies came into being, of which Namibia Press & Tool Company was the pioneer.
However, since some of the companies relocated to among others Zambia, some closed down and some converted to fully compliant Namibian companies, paying taxes.
“We are disappointed to lose Namibia Press & Tool Company, but more important is the Namibian Government needs to take a lasting look at export processing or a similar concept in order to bring foreign manufacturers back to the country with incentives. These manufacturers become the catalysts for local support services and products. Locals become service providers as transporters, maintenance and repairs in these factories, providers of services like cleaning, security, packaging materials etc”, a local expert in export processing zones explained yesterday.