(NEWZIMBABWE) Ethanol plant to sack 4,500 workers

Ethanol plant to sack 4,500 workers
White elephant ... The Chisumbanje ethanol plant which faces closure
01/05/2012 00:00:00
by Staff Reporter

UP to 4,500 workers at the US$600 million ethanol plant in Chisumbanje could lose their jobs as Energy Minister Elton Mangoma continues to resist pressure to introduce compulsory blending of petrol.

Green Fuel has already ceased ethanol production after exhausting storage capacity at the Chisumbanje plant with some 10 million litres of product in stock. The shut down has resulted in 700 factory workers being sent home on forced leave.

The company employs some 4,500 at the plant and at its vast sugar plantations, but officials say they could all lose their jobs unless the government introduces mandatory blending petrol imports with locally produced ethanol.
“We basically shut down the plant on February 6 and sent all the 700 employees on leave,” general manager, Graeme Smith said.

“We restarted the plant last week to keep the machine in shape and to keep our staff motivated, but we will be closing again on May 6.”

Workers committee deputy chair, Kokanayi Mapungwana, added: “If there is anything that needs to be done by the government, we are urging them to do that expeditiously.
“We have families to look after and we can only do that if we are employed.”

The company has struggled to push its product on the market as most service stations only have storage capacity for diesel and petrol.

Again, motorists argue that the price of the company’s E10 (a 10-90 ethanol and petrol blend) is only marginally lower than unblended petrol.

Green Fuel says higher blending rations would help reduce prices further but efforts to get government support with that and compulsory blending have so far hit a brick wall.

Energy Minister Elton Mangoma recently ruled out compulsory blending, telling Green Fuel to export their product if they could not sell it locally.

“We cannot have legislation for individuals, because that would set a bad precedent. They are free to export their product,” he said.

“We have already licensed them (Green Fuels), they are already on the market selling their fuel. I have not followed to see the volume which they are selling. Let’s not create a problem which is not there.”

However, Smith said exporting the ethanol would be counterproductive arguing the product would simply be re-imported into Zimbabwe as blended petrol but at an extra cost to the country.

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He said compulsory blending could help the country save up to US$250 million annually while higher blending rations would reduce pump prices by a further 10 cents.

Observers say the ethanol project which was expected to help end fuel supply problems as well as significantly reduce the country’s petrol import bill has fallen victim to coalition politics.

They claim that MDC elements in the government are reluctant assist the project because of presumed links between individuals associated with the company and President Robert Mugabe’s Zanu PF party.

“There appears to be a perception that by helping Green Fuel one is also helping Zanu PF because of the supposed links between the party and individuals said to be associated with the company,” said a source close to the developments.

“But that is unfortunate because it is only the workers who end up suffering and we are, in effect, undermining what could be a very important project for the country.”

The company is also understood to be fighting off predatory elements from Zanu PF who say they will not help unless they get shares in the project inline with the country’s economic empowerment laws.

But company officials say the project is already compliant since it is a joint venture between two private but local companies and the state-owned agriculture development agency, ARDA.

Said Arda chairman Basil Nyabadza: “We now have signed a Memorandum of Understanding which is guiding us in these negotiations (on indigenization).

“Remember that when this project started there was no indigenisation and we are now discussing to make it a joint venture project between Government and the investors, and not a BOT (Build Operate Transfer project,” he said.