A thriving Zisco essential to economic growth

manufacturer, Zisco was crucial for its growth, particularly its regional exports.
Zisco, the country’s major supplier of iron and steel products, is re-opening after years of closure due to capital constraints.
An Indian investor, Essar, recently took over the company from Government, and plans to invest close to US$1 billion in the business.
Zimplow chief executive officer Mr Zondi Kumwenda told New Ziana the company, which previously obtained all its steel requirements from Zisco, was currently relying on imports, a situation that affected costs and eroded profitability.
“We are importing steel from South Africa which is not viable. Importing steel from South Africa and re-exporting the same as finished product is adding another 30 to 40 percent on the cost of the product, destroying every competitive advantage available,” he said.
“Important to all steel users in Zimbabwe is the immediate revival of Zisco. If it does not get operational in the short-term, many companies that depend on steel will fold,” he said.
Meanwhile, Kumwenda said Government support in the form of incentives was needed to raise capacity at companies such as his to optimum levels. He said production costs in the country were high, and advocated for export incentives from Government.
Zimplow exports 50 percent of its output to countries such as South Africa, Zambia and Sudan.
“Exports from the Far East, especially from India, China who are our major competitors, carry huge export incentives of up to 25 percent, while there are no export incentives on Zimbabwe exports,” Kumwenda said. In the case of Zimplow, he said exports did not compensate the high local production costs because the bulk of Zimplow’s raw materials – particularly steel – was imported.-New Ziana.