Industries in Bulawayo relying on steel products have appealed to government to speedily recapitalise giant steel producer Ziscosteel, to enable them to expand their operations.
BY ALEXIS SIBANDA
The remarks came in the wake of government having said that the steel-producing firm is being revived, with shareholders meeting today to approve the takeover of the company’s $500 million debt by government, paving the way for the sale of its assets to Tian Li (Hong Kong) Limited.
Mealie Brand managing director, Walter Chigwada said they want to expand their production levels, but since the closure of Ziscosteel they are facing challenges in their business.
Mealie Brand is a division of Zimbabwe Stock Exchange-listed Zimplow Holding Limited.
“Since the closure of Ziscosteel, we have been having challenges of getting raw material because we depend more on steel to function and we now need Ziscosteel to come back faster, so that industries can be returned to normalcy again,” he said.
Chigwada said they were working with local companies in Zimbabwe that have begun supplying them with raw materials, but these are still not enough.
“There are many manufacturers who are prepared to work and sometimes raw materials fail to come on time and there will be not enough at times, which is a big challenge,” he said.
At its peak, Ziscosteel used to employ about 5 000 workers. It officially closed doors in 2016.
Its revival is set to trigger increased output in other sectors such as coal mining.
The revival of the former steel giant will be a major boost for Hwange Colliery Company Limited.
Ziscosteel was one of the largest off-takers of coal, getting 100 000 tonnes per month.
Chigwada said there is also need for local companies to be competitive in the export market, but as it is they are only able to provide 40% export of the total turnover which is not what they aim for.
“We also need the government to give them more foreign currency because the foreign currency that we are requiring is not yet enough as we need to be competitive in the export market,” he said.
“Whatever we get we pass it on to the customers so that we may be able to stay competitive.
“Right now we are putting up exports on a cost recovery basis on the market in order for us to generate the foreign currency but again even on that cost we are struggling to be competitive with other broad companies and we need the support of the government.”