adminNgoni Dapira Business Correspondent
PROPOSALS to resuscitate Mutare Board and Paper Mill factory has hit a brick wall, with no potential investors showing interest in the project whose recapitalisation requires up to a $100 million, Post Business has learnt.The acting regional director in the Ministry of Industry and Commerce Manicaland, Mr Phineas Sikanda, revealed this during a meeting between businesspeople and the new Minister of State Affairs for Manicaland Provincial Affairs, Cde Mandi Chimene last Friday.
Presenting a paper on the state of industry and commerce in the province, Mr Sikanda, said: “There were proposals to resuscitate MBPM and the project was marketed to potential investors, but no investor expressed interest in the project.”
Mr Sikanda who is also the chairperson of the value addition and beneficiation cluster in Manicaland under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation provincial initiatives, said according to a business consultant, between $30 million and $100 million worth of new technology was needed to get the mill back on its feet.
He said if the equipment was to be purchased from Europe, $100 million would be required, but if it is from China it would range from $30 million to $50 million for the mill to compete globally and operate profitably.
MBPM shut down in 2009 after facing viability challenges from high cost of production among several other challenges which resulted in the mill losing out on business from cheaper imports.
The pulp and paper mill factory was the leading value addition project in the province as well as the biggest employer.
The mill had two production lines where board and newsprint were made.
The combined capacity of the plant was approximately 30 000 tonnes per year and enjoyed market presence not only in Zimbabwe, but in the SADC and COMESA regions, serving countries such as Malawi, Zambia, Mozambique, Tanzania, Botswana, South Africa and the DRC. In his report, Mr Sikanda further revealed that since dollarisation in 2009, over
8 000 workers in Manicaland were laid off either voluntarily or forced. He said as of December 2014, only 13 000 workers were still directly employed by the manufacturing sector in Manicaland, which was very low compared to the working age group population of 1,1 million.
Manicaland’s manufacturing industry currently comprises the following sectors: timber, wood and furniture; food and drink; clothing and textile; chemical sub-sector, motor vehicle assembly and metals sector. Mr Sikanda said the clothing and textile sector was almost non-existent now following the liquidation of Karina Textile in 2013 and other notable clothing companies.
In response, Cde Chimene called for the province and the country at large to Look East for it to quick-start the ailing economy. She said with her influence as the vice-chairperson of the Zimbabwe-China Friendship Association, she would work towards creating trade and industry agreements between the two nations to breathe new life into Manicaland’s dying industry.
“As the Resident Minister, I pledge to support you and work with you to develop Manicaland. The purpose of this meeting is to get to know each other.
“I think we share the same vision as residents of Manicaland.
We want to see the province developing with business booming,” she said.
She also urged captains of industry to observe good governance in their business operations to attract Foreign Direct Investment as well as support the economic turnaround initiatives under Zim-Asset.
“You should be professional and ethical. Non-Performing Loans are high in banks which shows lack of good corporate governance systems in most companies.
“Investors will not put their money where there is no proper corporate governance,” she said. Cde Chimene added that Manicaland was the richest province in Zimbabwe, but has little to show for it.
Confederation of Zimbabwe Industries Manicaland vice-chairman, Mr Richard Chiwandire, in his vote of thanks, he said it was important for the Manicaland business community to work closely with Cde Chimene’s office to steer economic growth in the province.
He said the two main business voices in the province, CZI and Zimbabwe National Chamber of Commerce were looking forward working together with Government to ensure the success of Zim-Asset which is essential for the growth of the economy..
Online Reporter