Zimglass seeks funds to resume operations

Tinashe Makichi Business Reporter
Zimbabwe Glass Industries has applied for an undisclosed amount of money under the Distressed and Marginalised Areas Fund to raise fresh capital in a bid to resume operations, managing director Mr Gilbert Tapfuma said. The Gweru-based glass manufacturing company suspended operations last month due to working capital constraints and unsustainable utility charges.

Zimglass resumed operations in August this year, after two years of inactivity. The furnace rebuild was funded by a local consortium of local banks to the tune of US$8,5 million, but was not sufficient to meet working capital requirements.

“Zimglass has applied for DiMAF funds but (the challenge we are having is) the funds are not available at the moment, but we are optimistic,” said Mr Tapfuma.

The Government established the DiMAF to avail financial support to struggling companies at concessionary rates, in light of the high cost of credit.

Under DiMAF, a US$40 million facility between the Government and Old Mutual, a total US$24,7 million was disbursed against applications worth US$32,8 million approved.

Mr Tapfuma added that the glass manufacturer, upon resuming operations, would explore new markets by targeting regional countries to boost revenue.

“At the moment there is no change of business model as the company is still capable and can produce glass packaging for beverages, liquor and pharmaceuticals We are working on identifying new markets in the region with the main target being Zambia where there is high demand for flint glass which is used to bottle soft drinks,” he said

The company suspended operations in September 2010 to embark on a refurbishment exercise of the blast furnace as well as replacement of obsolete equipment.