Steelmakers resumes exports

Midlands Correspondent
REDCLIFF based steel manufacturer, Steelmakers has resumed regional exports, which it had suspended since the beginning of the year owing to the firming US dollar against regional currencies. The local foundry firm manufactures close to 36,000 tonnes of steel per annum, which is converted to various shapes to cater for the engineering, agriculture, motoring, mining, construction and manufacturing industries.

Steelmakers operations director, Mr Upendra Alamwar told Chronicle Business that there was a need for the Government to incentivise exporters as well as reducing the price of scrap metal if local foundries are to be competitive on the export market.

“We’ve started exporting again to Zambia, Malawi and Mozambique but the firming of the United States dollar against the regional currencies has affected us because their input costs remain in their devalued currencies and it works to their advantage, which affects our competitiveness,” he said.

“I believe we can do better if the Government comes on board and puts some incentives for exporters and also if there’s a reduction in the price of scrap metal, which is our feedstock. This will lower our costs and pricing and make us compete with other players in the region.”

Mr Alamwar said the company was hoping that regional currencies will become stronger in the not so distant future, which will boost exports. He said capacity utilisation at the company was around 40 percent having been affected by the shortage of scrap metal.

Foundries were, eight years ago, forced to use scrap metal as an alternative following the closure of the Zimbabwe Iron and Steel Company (Ziscosteel), which provided raw materials for them.

The Government banned the export of scrap metal in 2008 in order to promote continued production of the local steel industry. The re-opening of Ziscosteel, which at one time was the largest integrated steelworks in Africa, would have provided feedstock to local foundries but has been delayed following the collapse of the Essar deal.

No suitor has been found to take over operations at the company as depressed steel prices on the world market have made investment in the company unattractive.