The Sunday News
Business Reporter
THE closure of Ziscosteel (now NewZim Steel) for over half a decade contributed to the demise of Bulawayo’s industry and the poor performance of the National Railways of Zimbabwe.
Addressing journalists during a press conference to mark the closure of the Zimbabwe International Trade Fair yesterday, Industry and Commerce Minister Cde Mike Bimha said the shutting down of Ziscosteel had ripple effects on other industries and as such, the company’s failure to start operations was hurting the economy.
“There are a number of companies in Bulawayo that have closed or which are ailing but if Zisco was to come on board tomorrow those companies would also come on board.
“There was quite very strong linkage between the manufacturing companies in Bulawayo and Zisco. So when Zisco closed, those companies suffered and interestingly there was also a relationship between the manufacturing sector in Bulawayo, Zisco and National Railways of Zimbabwe (NRZ),” Cde Bimha said.
He said NRZ used to realise 60 percent of its cash flow from transporting various products destined to and from the steel maker.
The closure of the company meant that NRZ which at its peak in 1998 used to ferry goods in excess of 18 million tonnes saw the figures dwindling to 3,7 million tonnes in 2011.
About 100 companies were reportedly closed in the last decade while others relocated.
Cde Bimha said Government was committed to expediting the revival of NewZim Steel and efforts to honour its debts were under way prior to the finalisation of its deal with Essar Holdings.
In 2011, Government and Essar Holdings signed a $750 million deal to revive operations at the Redcliff-based steel manufacturing company.
“Our ministry has a number of quick wins that we must achieve in less than 12 months and the number one of those is the operationalisation of Zisco.
“So this is very much dear to our hearts and there is Government commitment that this is done and we think once we see Zisco online we will also see ramifications of that into the entire industrial sector and more so here in Bulawayo,” Cde Bimha said.
He said the rehabilitation of NewZim Steel would see the reconstruction of other new plants since the current ones were now derelict.
“We are looking together with the investor on other activities that will take place before the commissioning of this new plant. For example, we are looking at possibilities of importing billets that can be used by Lancashire Steel to make wire,” Cde Bimha said.
Before the closure of steel production operations in Redcliff in 2008, the firm was strategic to the country’s economy, employing more than 4 000 workers and at its peak produced about a million tonnes of steel per year for the domestic and foreign markets.
Essar has announced plans to increase production at NewZim Steel to 14 million tonnes a year.
