Essar upbeat on Zisco

of the steel firm as discussions on the agreement near finality.

The company made a commitment to pay off Zisco’s US$340 million debt.
In that regard, it has already agreed on a payment plan with KFW Bank of Germany while preliminary discussions have been held with Sinosol and the Chinese government.

In an interview at its head office in Mumbai last week, Essar Steel chief executive Mr Malay Mukherjee said Zimbabwe represented one of the group’s major investments.
Plans had already been drawn on the rehabilitation process, he said.
“We are ready and our commitment has already been shown. We have engineers ready. We have already selected vendors and initial capital is already lined up,” he said.

“We have started cleaning the plant now and a lot of housekeeping has been done.”
A team of at least 50 people from Essar is already on the ground while efforts to lure former employees scattered in the region has begun to bear fruit.

In March, Essar bought 54 percent of Zisco from the Government, making it the major shareholder.
“Our teams on the ground are presently trying to understand the country and Zisco’s requirements. We are also drawing up the activity plans to ensure that from on Day Zero we are ready to start rehabilitating Zisco and to ensure that its former glory is restored.

“We are committed to the project and the Government (of Zimbabwe) is committed. Accordingly, we have left no stone unturned.”
Government has already given Essar guarantees for consistent power supply, water, rail transport and a package of finance concessions that include tax holidays.

At least 1000 employees will be required once full-scale operations resume, but Essar said these would be engaged in phases.
International trends show that a steel plant producing one million tonnes of steel annually requires 1 000 people.

Therefore, with production at Zisco expected to reach 2,5 million tonnes over the next few years, the employment figures would be expected to double or even treble.
Once fully operational, Zisco would help generate jobs and create wealth in other spheres.

Every job in a steel plant generates five others downstream.
Essar employs 70 000 people in operations dotted across the globe. The group majors in steel, oil and gas, power, communications, shipping ports, logistics and projects.

The company, whose revenue averages US$15 billion annually, was the first Indian company to be listed on the London Stock Exchange’s 100 benchmark index.
The Essar Steel chief executive said Zimbabwe was important in that it had immense potential as an economy and Essar was one of the first comers following the fundamental economic changes taking place,

largely ushered in by the multi-currency regime and deliberate efforts by Government to improve the operating environment to attract investment.
Furthermore, Essar said it looked to Africa as the next driver of the global economy, hence its investment in this country.

Zimbabwe was endowed with huge resources and was also strategically positioned geographically.
“Zimbabwe has a full resource base. Everything we need is there. It’s just that the resource base has not been exploited in the right way. So, Zisco is a steel plant with the full range of raw materials and the full African market,” said Mr Mukherjee.

On controversy surrounding the construction of the slurry pipe to Beira in Mozambique, he said the whole issue had been misconstrued.
“People pick words out of context. Our first priority remains Zisco’s rehabilitation,” he said.

Reports were that Essar planned to build a slurry pipeline from Chivhu to Beira to export iron ore before reviving Zisco.
Fears were that Essar had become more interested in iron ore deposits for their other operations, which Mr Mukherjee dismissed as “baseless”.

Essar it was in Zimbabwe, not just for Zisco, but also to be part of the economic transformation process.
The company would promote the transfer of skills and technology, particularly given the fact that after lying dormant for some years, the steel plant had not updated its operational systems to global trends.
To that extent, technological developments would also be in electronics and hydraulics particularly, given that Zisco was using a mechanical system before.

Mr Mukherjee remained upbeat that contrary to some beliefs, Zimbabwe’s economy was destined for greater heights and challenged more firms to come in at this stage.