eBusiness Weekly
Nelson Gahadza
Zimbabwe’s annual steel imports are estimated at over US$1 billion as the country no-longer has a vibrant steel industry in the face of rising demand from new projects for following the demise of the once vibrant Zimbabwe Iron and Steel Company (Zisco).
The metal foundries industry was previously dominated by Zisco, which has over the years operated under care and maintenance.
In recent years, the economy has witnessed several infrastructure projects that require significant amounts of steel, which in essence presents an opportunity for revival of the country’s steel sector.
Most of the projects resonate well with the country’s five year National Development Strategy 1 (NDS1), a strategic development plan that puts more emphasis on infrastructure development.
A recent Zimbabwe Institute of Foundries (ZIF) summit in Harare revealed a steel industry in need of recalibration, in order to champion sector revival through retooling, metal beneficiation and banning scrap metal exports.
“At the moment, the industry is in shambles. We really need to relook at it and we hope the Government is coming up with new policies that will benefit the local industry and we also hope the industry is ready to participate,” Coster Takawira of Baldmin Holdings said.
Baldmin specialises in mineral processing plants, mining equipment manufacture, equipment refurbishment and plant maintenance.
Wilfred Motsi, the projects manager for Dinson Iron and Steel, said struggling Ziscol has exposed the country to steel imports from as far as China.
“As the country is pursuing a serious infrastructure roadmap, we have consumed a lot of steel products so the onus is to develop our industry,” he said.
Andrew McFarlane from South Africa said Zimbabwe’s foundries industry should invest in innovative technologies and software in order to improve the quality of metal products.
He said technology can help reduce costs, which have resulted in local steel becoming expensive compared to imports.
According to Takawira, the country’s pricing structure is pulling down the growth of the industry.
Finance and Economic Development Minister, Mthuli Ncube, had earlier indicated that the government will consider giving the metal industry players tax rebates for the importation of critical raw materials.
“As the Government we will fully support the promotion of import substitution of metals products through relevant policy interventions,” he said.
Minister Ncube said the Government through NDS1 is aware of the need to re-industrialise and unlock Zimbabwe’s metal casting industry in the short-medium and long term plans.
“If we extract mineral metals through mining, beneficiate these through tool making and die casting, we can begin to re-industrialise our economy,” he said.
He said the Government sees opportunities to grow the industry and take advantage of various incentives that are available for all businesses that support import substitution and export generation.
Deputy Minister Mines and Mining Development, Polite Kambamura, said the metal casting industry faces challenges of raw materials due to the closure of Ziscosteel.
He said the foundry industry players should complete the value chain cycle by owning small scale mines and furnaces, indicating that the government remains committed to the capacitation of the metal foundry industry and is in the process of totally banning the export of scrap metal.
Meanwhile, other challenges faced by the metal casting engineering sector include limited access to finance and foreign currency for importation of raw materials and capital equipment, stiff competition from imports, liberal export of scrap metals that starve the local industry of critical inputs and obsolete technology leading to high cost of production.
Others are erratic power supplies and low product uptake particularly by the Automotive sector, among others.
