Online Reporter
THE new mills of Dinson Iron and Steel Company at Manhize, which brought steel production back to Zimbabwe using ultra-modern technologies that promise the highest standards, have already made a substantial economic impact.
In the first six months of this year, Disco sold more than US$100 million worth of steel to local and regional users, and this was only in the earlier stages with new products being added to the value chain continuously.
But already local construction is largely using Manhize steel, and this includes the giant infrastructure works such as the Gwayi-Shangani Dam.
Considering the growing private and public investment into construction in all its forms, the fact that just about everything in that sector can now be produced locally is important.
Zimbabwe was already making the cement, in a range of types and grades, and bricks and timber trusses and the like, and by adding in the steel is now for all practical purposes self-sufficient. This allows costs to be fixed upfront for many projects with far fewer variables. It also means that those in the industry no longer have to risk delays, since they can get firm delivery dates from their local suppliers.
Tsingshan Group of China has been a model investor in Zimbabwe and seems quite prepared for the long haul. The initial contacts were made soon after President Mnangagwa took office and inaugurated the Second Republic.
Tsingshan was keen, but wanted practical details of how the pro-investment strategy and clampdown on corruption would work in practice.
With the policy turned into working measures, the company was then coming in. A fair amount of the investment policy has been partly shaped by how an innovative concern like Tsingshan was willing to overcome problems, such as the funding for the national grid connection that it needed to bring power from its power station in Hwange to Manhize.
The company also moves fast. The ground-breaking ceremony, overseen by President Mnangagwa, was as recent as October 2022. Now, less than three years later, the steelworks are producing more than 600 000 tonnes of pig iron, steel billets and rebar.
But by addressing these concerns correctly and properly, Zimbabwe has not only satisfied its biggest single investor in recent years, one who has sunk US$1,5 billion, but has opened doors for others to come in, both in what has been done and the standards that have been set, and in the attitude of “let’s fix it” if problems to arise.
Word does get around international business investors and success thus breeds success.
Disco is not just a steel producer making basic steels. The company already runs a major ferrochrome smelter in Selous and a coke plant in Hwange. This allows it to set its own agenda for expansion with its iron ore reserves near the steelworks and its own coke from Hwange, the other major raw material.
But Tsingshan’s interests in chrome and nickel mean that it can move ahead, when it is ready, into the stainless steels. This is what the company is already well-known for globally. These two alloys are the critical ones for almost all stainless steels. This will add value to its products as well as widening the range of materials that Zimbabwean manufacturers have access to.
Disco is keen on building up ties with Zimbabwean industry, which it sees obviously as its major customer. Being able to discuss precise requirements for steel with your major supplier must be a serious advantage for any manufacturer, and this should help to build a proper heavy industrial base in Zimbabwe.
It is already producing the rebar for construction and has announced plans for sheet steel production providing another industrial sector with an essential material.
We talk a lot about adding value to our raw materials and our exports. But this needs to be put into practice at ever higher levels. Exporting steel is obviously far more profitable than exporting iron ore and coke, but even more profitable is exporting products made from steel. Having all the necessary raw and intermediate materials on tap in one country does allow that country to look at the sort of industry that might not be so viable when half the materials have to be imported.
Disco has already made Manhize part of Zimbabwe. The new town is there and providing jobs and economic life. It is not something that has been kept apart from the country and most of the workers in the steelmills are Zimbabwean, with Disco having the sound policy of training up local people. This is sound economics since local staff have many advantages, including being able to put in lifetime careers and not needing home leave.
Now that Disco has moved into solid steel production and proved it can deliver, other investors, foreign and local, need to work with this major supplier to continue building up the steel-based industry in Zimbabwe and converting the country into a major heavy industrial state able to support an ever larger structure.
