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Business Correspondent
COMPANIES in the Midlands Province have not been spared the economic challenges prevailing in the country and a number of them have closed down while the rest are operating far below capacity. In an interview last week, the Confederation of Zimbabwe Industry (CZI) Midlands Province Chamber president, Ben Mashangu, said companies in the province were struggling, a situation that had also been worsened by the closure of the steel giant, Zisco (now New Zimsteel).
“Midlands companies are equally affected by the liquidity crunch currently prevailing in the country. They have also suffered from competition from imported products,” said he said.
Mashangu said on average most companies were operating below 50 percent capacity due to operational constraints.
“I don’t have the actual figure of the companies that have closed down but the big companies that have stopped operating are of course the New Zimsteel, Zim Alloys and there are other smaller chrome smelting companies like Ferro chrome,” he said.
Mashangu bemoaned the continued closure of New Zimsteel saying it had left many downstream firms in limbo, a case in point being Zim Chem. He said Zim Chem was set up to process the major by products from the steel giant.
At the moment, Zim Chem is operating at an average of less than 25 percent capacity utilisation due to a shortage of raw materials.
“When Zisco was running, its coke ovens were producing by products like crude tar and crude benzine but when the steel giant shutdown, it meant that almost 75 percent of Zim Chem raw materials could not be accessed,” said Mashangu.
He said from crude benzine, Zim Chem could make a lot of by-products like toluene, thinners and many others.
“We have a lot of chemicals that Zim Chem was producing but have been put on hold because there are no raw materials,” Mashangu said.
He added that the country was now forced to import some of the products that could be produced locally.
Said Mashangu: “We now have to import a lot of road chemicals that we can no longer produce.
“Businesses in the Midlands survive mainly on what happens at New Zimsteel and once the company comes to life, you will see a great improvement”.
He appealed to the government to bail out the companies. “With the coming of ZimAsset, we are hopeful that there will be some funding to revive some of the companies.”
Mashangu said Midlands firms were now in the process of coming up with working capital requirements needed by companies in the province.
Online Reporter