Unmoved by allegations of work-related racial abuse cases at its Redcliff plant, Steelmakers Zimbabwe said it would boost capacity utilisation by more than 50% to improve cash inflow over the next six months.
Group general manager Alexander Johnson said the company had borrowed $2,5 million from banks to fund its expansion programme to ensure production rose from the current 1 200 tonnes to 3 000 tonnes of steel per month by year end.
“We need to produce 3 000 tonnes per month to break even, but at the moment we are only doing 1 200,” he said.
“Our rolling mills have a capacity to produce 3 000 tonnes while our smelting plant has a lower capacity of 1 200 tonnes.
“The difference was supposed to be bridged by Ziscosteel, which was expected to supply us with billets for our rolling mill. We are now in the process of improving capacity utilisation for our smelting plant so that we can reach break-even point,” said Johnson.
Steelmakers Zimbabwe also lamented high production costs in the steel industry and unfair competition from Chinese investors accused of flooding the market with cheap quality steel.
“We have lost our market in Zambia, Malawi and Botswana who are manufacturing steel at a relatively cheaper cost and they are now bringing the products into Harare and taking over the market while we grapple with huge utility costs such as labour, electricity and water bills.
The Chinese have also come in and we can’t compete with them. They have absolutely no ethics and pay no attention to the safety of their workers, while paying them peanuts.
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This has affected our market share and, as a result, we are operating at a loss,” said Johnson.
Ironically, workers at Steelmakers Zimbabwe have accused their employers of underpaying and racially abusing them.
Late last week, Prime Minister Morgan Tsvangirai toured the Redcliff-based plant and called on the government to implement policies that would help revive the manufacturing industry which he said was now in the doldrums.
“Companies that have closed and those at the brink are many. It’s frightening and the inclusive government should formulate policies to make sure companies survive and start employing people,” said Tsvangirai.
