Govt, private sector unite to revive industry
Senior Business Report
THE Government in collaboration with private sector players are currently working to revive the fortunes of the country’s iron and steel industry, Industry and Commerce Minister Sekai Nzenza has said.
Zimbabwe’s iron and steel industry took a significant knock with the closure of the Zimbabwe Iron and Steel Company (Zisco) circa 2008, with a 2014 study by the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) estimating that the steel company’s closure cost the economy over US$3 billion in potential revenue per year.
“Government in liaison with the Engineering, Iron and Steel Association of Zimbabwe and other stakeholders are already implementing a road map towards resuscitation of the iron and steel value chain,” said Minister Nzenza in a speech read by acting permanent secretary Never Katiyo during yesterday’s launch of the inaugural State of the Engineering, Iron and Steel Industry Report.
Part of the broader revival of the critical sector includes resuscitation of the country’s largest steel works company.
Zisco either partly or wholly owns equity in companies including ZimChem, Lancashire Steel and Buchwa Iron Mining Company (BIMCO), the holder of iron concessions.
Just last month, Zisco issued a tender document inviting expressions of interest from potential investors.
“The engineering, iron and steel sector is a strategic sector that used to contribute significantly to the Zimbabwean economy.
“The sector’s vibrancy revolved around Zisco, which had a production capacity of one million tonnes of steel per annum at full capacity and employing over 5 000 people.
Seventy percent of the steel was exported, contributing significantly to foreign currency generation,” said Minister Nzenza.
She, however, said now focus was on the wider iron and steel value chains.
“The iron and steel value chain which is among the key value chains selected by the National Development Strategy 1, is undoubtedly a key cog in the manufacturing industry, as the robust architecture of the modern world is made up of steel.
“Therefore, the quality and quantity of engineering, iron and steel industry of a country greatly influences the nature, type and pace of industrial development.
“The engineering, iron and steel industry is a basis for the development of several industries in the global economy.”
Economist Daphne Mazambani said the sector is laden with opportunities.
“Zimbabwe’s iron and steel industry was affected by the closure of Zisco as it affected all other downstream players.
“Opportunities that exist in the sector pertain to the revival of Zisco, its impact on many potential sectors, as well as other policy induced opportunities,” she said.
And from a broader perspective, Ms Mazambani said investors can also benefit from improving global commodity prices.
Experts say the iron and steel industry has strong forward and backward linkages with other key economic sectors.
In Zimbabwe’s case the numbers show that the construction industry consumes around 70 percent of the output from the iron and steel sector, while the manufacturing industry take up 20 percent. And the mining and agriculture sectors accounting for 6 percent and 4 percent, respectively.
According to the State of the Engineering, Iron and Steel Industry Report (2021), the sector is currently exporting an average of over 200 000 tonnes of iron and steel products per year.
Industry stakeholders at yesterday’s launch, however, emphasised the need for Zimbabwe to export value-added products, as well as to cut down on exports of scrap metal, which is a key raw material for the local foundry industry.