The Sunday News
LANCASHIRE Steel, a subsidiary of New Zim Steel, is set to reopen in January next year after Essar Holdings, which recently acquired a majority stake in the giant steel company agreed to immediately inject capital into the wire manufacturing company.
Essar Holdings on Monday held a meeting which comprised the India-based company representatives and Redcliff and Kwekwe municipality officials where New Zim Steel chief executive officer Mr Vinod Arora said his company had set aside money to immediately inject into Lancashire.
Mr Arora said the revival of Lancashire Steel was imminent and it would start operating in January next year.
Essar management confirmed the development but declined to give an official statement.
Kwekwe Mayor Councillor Matenda Madzoke, who attended the meeting on behalf of Kwekwe City Council, confirmed that Essar had reiterated that it had already set aside money for Lancashire Steel.
“We were invited to a meeting by Essar Holdings CEO Mr Arora on Monday where he told us that there was money to revive Lancashire Steel while they gradually resuscitate New Zim Steel.
“We were informed that the wire manufacturing company would start importing feedstock in January and start producing in February next year.
“The company will be operating at 30 percent of its production capacity,” he said.
Clr Madzoke said Mr Arora said the company would double its production within three months of operation.
“We were also informed that by the end of the year Lancashire would be operating at full throttle.
“We are hopeful that these companies are revived as soon as possible because they are the backbone of Kwekwe City,” he said.
Lancashire Steel, which used to produce wire among other steel products, closed in 2010 as a result of shortage of supply after its mother company Zisco Steel suspended operations.
Deputy Minister of Industry and Commerce Cde Chiratidzo Mabuwa recently said Essar Holdings had agreed to immediately inject money into Lancashire Steel to commence production over the course of six months while addressing captains of industry in Gweru.
“Essar is going to inject money in the project particularly towards Lancashire Steel for the immediate revival and to commence operations using imported feed stock over the course of six months,” she said.
Government rekindled hope for the revival of one of the biggest integrated steelworks in Africa when it sold 54 percent of its shares in Ziscosteel to Essar in a $750 million deal which included taking over the company’s debts and liabilities.
Ziscosteel had ceased operations in 2008 as it choked under a $340 million debt and other viability problems and Essar Holdings came to its rescue.
The Essar deal was expected to bring back life to Redcliff while at the same time uplifting the wellbeing of over 3 500 workers.
But a year after the signing of the deal, hopes which had been rekindled are slowly fading.
Under the deal, Essar Holdings were to invest more than US$4 billion over the next four years in New Zim Steel, including setting up a 600MW thermal power plant to support the steelworks.
The Government-Essar deal had brought light to ailing industries in the Midlands province which had since downscaled production due to liquidity challenges.
