Zim industry growing despite sanctions: Bimha
By: Prof Tshuma, Business Reporter
Posted: Monday, April 11, 2011 7:24 am
INDUSTRY and Commerce deputy Minister and House of Assembly member for Chikomba West Constituency, Mike Bimha has expressed confidence that the local industry will steadily grow regardless of the Western imposed economic sanctions.
In an interview with The People’s Voice Business, Bimha said although the economic sanctions were contributing to poor economic growth and remuneration, there were high expectations that local industry would grow more than yesteryear.
“What we can say at the moment is that, from the look of things, we are expecting a modest growth from the local industry since the economy has grown a bit,” said Bimha.
“Last year the local industry recorded a significant growth that this year we have no doubt that we will have another growth that is acceptable but the sanctions are affecting the growth such that if they were not there, we were going to have a tripled growth,” he added.
He said the local industry was facing a lot of unjustified competition from foreign industries through imports such that the local industry’s produce would be second preference at the market.
“I think the local industry is failing to compete with the foreign markets because imported products will be cheaper as they will be of low quality as compared to the local products that are original,” he said.
Bimha expressed concern over the 'paltry' allocation to local industry by treasury.
He said it was high time that the treasury should allocate enough money to support in-house industry as that will in turn increase revenue inflows to government through taxes and create employment.
The local industry, Bimha said, needs to acquire modernized equipment so as to deal with opportunity cost. The equipment used by local industry has become obsolete.
“Usually equipment has to be revamped so as to tally with modernity because some of the equipment has become too old such that production becomes minimal when other similar industries abroad use modern equipment capable of producing more at a very short space of time,” he added.
Bimha castigated MDC-T formations for inviting sanctions which have stopped foreign investors from investing in the country.
The deputy minister, however, said the trading climate had improved compared to four years ago as locals are beginning to find ways of working in the sanctioned economy.
He also emphasized that Zimbabweans should now focus on measures to make sanctions irrelevant rather than continue talking about their effects.
The local industry has been affected much by the sanctions and several of them have closed down due to the effects of the unjustified sanctions.
Economic sanctions on Zimbabwe were invited by the MDC-T party as a way of trying to effect a regime change in Zimbabwe.
The sanctions were invited after President Robert Mugabe embarked on a historic agrarian land reform which was meant to empower indigenous people who owned minority of the productive land at the expense of the white minority who owned majority of the productive land.
Labels: MIKE BIMHA, SANCTIONS, ZDERA
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Ziscosteel deal sealed
By Golden Sibanda
Ziscosteel’s revival took a giant step forward yesterday with the Government anno-uncing it had agreed to sell part of its shareholding in the State enterprise to Mauritian firm Essar Africa Holdings.
The deal will see Essar Africa securing about 54 percent of Zisco and injecting at least US$355 million in fresh capital.
This will be through the purchase of roughly two-thirds of Government’s 90 percent shareholding in the troubled company, which ceased production in 2008 owing to financial constraints and a huge debt overhang.
The Herald can reveal that Essar will pay off Zisco’s US$240 million debt to KFW of Germany, pay US$55 million for Govern-ment’s stake and invest US$65 million in refurbishing blast furnaces 3 and 4.
The company will also invest in renewal of the coke oven battery and human skills development among other areas to rejuvenate the steel giant, which employed more than 4 000 workers at its peak.
Industry and Commerce Deputy Minister Mike Bimha said President Mugabe, Prime Minister Morgan Tsvangirai and Deputy PM Arthur Mutambara had approved Essar’s bid for the dormant steel firm.
He said engagement of a well-resourced foreign partner would relieve the Government of obligations in terms of the entire Zisco debt.
More importantly, the deputy minister said, the development will enhance Zimbabwe’s economic development through the supply of raw materials to industry, increased exports and job creation.
“I am pleased to announce that the country’s three principals agreed to and appro-ved the recommendation that Essar Africa Holdings be assigned the responsibility of comprehensively reviving the country’s steel giant, the Zimbabwe Iron and Steel Company,” he said.
Deputy Minister Bimha said the deal would soon be wrapped up.
He said Essar Holdings was expected on the ground by December and to start operations as soon as possible.
Mr Firdhose Coovadia, Essar resident director for Middle East and Africa, said: “We are delighted to have been selected as the preferred bidder for the revival and expansion of Zisco.
“We believe Zisco is well-positioned to be a low-cost steel producer that can meet the growing demands of the regional steel market in sub-Saharan Africa.”
He said Zisco was a strategic asset for Zimbabwe and Essar would make meaningful contributions to the country’s economic development.
Zisco has the capacity to produce a million tonnes of steel annually.
Mr Coovadia said Essar Holdings was on track to produce 14 million tonnes of steel a year and its excellent record in commissioning and running Greenfield and Brownfield steel plants across the world would come in handy for Zisco.
The Essar conglomerate is a leading player in the steel, oil and gas, power, communications, shipping ports and logistics, projects and minerals sectors.
It is present in 20 countries across five continents and has a revenue base of approximately US$15 billion while employing more than 60 000 people.
In Africa, the Mauritius-based firm is involved in gas and oil operations in Nigeria, Kenya and Madagascar; telecomms in East Africa; BP operations in South Africa; and coal in Mozambique.
Efforts to revive Zisco hit a brick wall in 2004 when Global Steel Holdings of India pulled the plug on a US$400 million deal under unclear circumstances.
After that, Zisco survived on selling scrap metal.
Another attempt to revive the firm failed early this year after the Presidency rejected industry giants Arcelor Mittal of South Africa and Jindhal Steel of India, because it was felt they would not adequately meet Zimbabwe’s interests.
The Midlands province-based steel giant has exclusive rights to iron ore deposits in Zimbabwe, hence the importance of its revival to low-cost steel supply, indus- trial development and economic revi- val.
Labels: ESSAR AFRICA HOLDINGS, MIKE BIMHA, ZISCO
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