New Zimbabwe.com

Zisco collapse leaves Zimchem on the brink

KWEKWE-BASED chemical producer, Zimchem Refineries is facing collapse after it lost 75 percent of its business due to the fall of Ziscosteel from which it is failing to recover, an official said on Monday.
The steel giant used to provide the company with coal tar, a by-product from steel production, which it used to manufacture chemicals such as creosote oil and benzene.
It also used to produce tar that is used in road construction.
Zimchem chief executive officer, Ben Mashangu told The Source in Bulawayo that the collapse of Ziscosteel in 2008 had slowed down operations at the company.
“Ziscosteel used to provide 75 percent of our raw materials. After its collapse, it basically meant we lost 75 percent of our business. We were left with 25 percent which is sustained by coke from Hwange Colliery and some imports,” Mashangu said.
“Those in timber industry are importing the creosote oil because we cannot meet the demand.”
The government sold 54 percent of its stake in Ziscosteel to Essar Africa Holdings Ltd, an arm of India’s Essar Group in November 2010 but disagreements over mineral ownership held up the deal.
But Industry and Commerce minister, Mike Bimha last week said government had issued a special grant to Essar for exploration work and given the company claims of iron ore in Buchwa and Redcliff.
Ziscosteel, once the largest integrated steel works in the region, shut down in 2008 due to gross mismanagement and a failure by the state-owned firm to upgrade its equipment.
At its peak, Ziscosteel employed over 5,000 people and was a major producer of iron ore and steel products which it exported across the continent and Europe.
It was also the backbone of the local steel industry and its collapse has seen the sector operating around 10 percent.Advertisement