adminGOVERNMENT has brokered a deal between a South African-based company, Moti Investments, and Zimbabwe Alloy Smelting Company (Zimasco) that could see the Russian-owned company buying all the produce from the Kwekwe-based chrome-smelting firm amid plummeting chrome prices on the global market.
Zimasco recently switched off two of its blast furnaces and proposed a compulsory retrenchment of its workers owing to financial constraints due to plummeting chrome prices on the international market that had also seen the company scaling down production over the past few years.
Speaking at a rally recently in Kwekwe, Vice-President Emmerson Mnangagwa said Moti Investments which recently set up a state-of-the-art exothermic chrome-smelting plant which was commissioned by President Mugabe, had agreed to buy ferrochrome from Zimasco, a deal which is likely to rekindle hope for the Chinese majority-owned company.
“Zimasco has downsized production and most of the people have lost their jobs. Zimasco is one of the strategic companies in Kwekwe that has created a lot of employment for the local people.
“As you all know Zimasco was supporting MDC in the run-up to the 2013 elections hence their challenges were artificial. However, we are now reviving it. We have met them several times to ensure that we find a lasting solution.
“There is a company, Moti Investment, that has committed itself to buy all the ferrochrome produced by Zimasco and they entered into an agreement,” he said.
The Kwekwe-based chrome smelting company has a workforce of about 1 500.
Zimasco general manager (corporate communications) Ms Clara Sadomba recently confirmed that the company would soon retrench its workers owing to financial constraints and fluctuating demand for ferrochrome.
“Employees that are excess to requirement have been offered voluntary retrenchment over the course of 2014, with some of these employees taking up the voluntary retrenchment. The employees who did not opt for voluntary retrenchment are currently engaged in negotiations with management in efforts to achieve amicable separation through compulsory retrenchment. As this is an ongoing process the numbers are not final at this stage,” she said.
Ms Sadomba said plummeting ferrochrome prices on the international market had forced the company to employ strategies that enable the company to operate under conditions that are in tandem with ferrochrome market.
“Since the global financial crisis of 2008, commodity markets in general, and the ferrochrome market in particular have been hard hit with prices on a continuous downward trend.
Over the last 18 months, Zimasco has been undertaking various productivity improvement initiatives in efforts to re-align and restructure the organisation for viability in the current operating environment.
These initiatives have resulted in introduction of new production processes, changes to certain aspects of the operations as well as restructuring of the labour complement to match the new organisational requirements,” she said then.
VP Mnangagwa added that the reincarnation of Zisco Steel, now New ZimSteel, was being slowed down by plummeting metal and steel prices on the global market.
He said Essar had recommitted itself to reviving the Southern African Region’s erstwhile giant steel company.
“During the inclusive Government, Essar deal was being dragged by some of the Ministers whom we had appointed to facilitate its revival but they started inhibiting progress and as a result nothing materialised and they returned to their home country after losing hope.
“However, last year President Mugabe re-engaged them and re-strategised. They are now back and their engineers are at work at the site but the challenge now is that the steel prices have gone down but they are back to revive the company,” he said.
Online Reporter