ZiscoSteel not ‘scared’ of Chinese firm competition

ZiscoSteel not ‘scared’ of Chinese firm competition

ZISCOSTEEL board chairman Martin Manuhwa says the steel maker is not “scared” of competition from the Chinese firm Dinson Iron and Steel Company, which is constructing a US$1,5 billion iron and steel plant in Mvuma.

The Manhize plant, touted as Africa’s biggest integrated steelworks, is expected to produce 1 200 million tonnes of carbon steel at the completion of the first phase.

The Chinese company plans to produce 20 million tonnes of carbon steel annually by the year 2030.

But Manuhwa told journalists last week during a tour of ZiscoSteel operations in Redcliff that they would “tackle” their competitors head on.

“So, our competitors, we are saying welcome home.

“We are ready to compete with them on technology, on human capital and we are also ready to compete with them on the cost of production and we can benchmark,” he said.

“We would have loved it if they'd gone into the high end stainless steel manufacturing so that they also don't compete with us on construction steel.

“But we don't choose competition terrain.

“We will tackle them head on. And we are going to be ‘co-opetitors’ rather than competitors.”

He added: “By this, we can even envisage a model if we overmine our ore and they may need to be an off taker and they can process it either for us or buy part of our raw materials.

“In that way we can create our value.

“So, you see we are not scared of that competition.

“I don't think they have limestone; we have limestone so I see them as my customers.

“They will need limestone from us or other suppliers. So, to us that competition is very welcome.”

ZiscoSteel chief executive officer Farai Karonga weighed in:  “Our market, we are thinking of the Zimbabwean market and we will be getting some very stiff competition from the Manhize people.

“So, we will be getting competition from them, but we are willing to compete.

“Then we also want to export. In the old days, the split was like 30% Zimbabwe in terms of market and then 70% going out.”

Once Africa’s largest integrated steel making plant with a 5 000 workforce, ZiscoSteel dramatically collapsed over the last two decades largely as a result of mismanagement.

A series of agreements between the government and giant foreign investment firms to take over the defunct steel maker failed to take off during the same time.

But, following a contract agreement between Kuvimba Mining House (KMH) and government last year to revive the obsolete steel plant, the company’s board and management are optimistic that Ziscosteel can still stir Zimbabwe’s broad economic revival efforts.

Over time, KMH intends to raise US$300 million from the sale of iron ore reserves held by Ziscosteel among other means.

The mobilised funds will be reinvested into the obsolete steelmaker.

The investment is expected to bring in US$200 million in revenue per annum.

The board chairman indicated that with an iron ore asset valued at an estimated US$20 billion, Ziscosteel can gradually be resuscitated.

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