HomeBusinessNRZ, CSC, Ziscosteel on the rebound

NRZ, CSC, Ziscosteel on the rebound

A RAY of hope beckons for Bulawayo’s industry that has endured over a decade of economic recession. Three of the city’s key historic economic enablers, National Railways of Zimbabwe (NRZ), Cold Storage Company (CSC) and Ziscosteel, appear to be on the mend.
BY MTHANDAZO NYONI

The three are the backbone of a number of companies in the City of Kings and their demise had spelt doom for the country’s industrial hub.

But now that the new government has started directing efforts to revive these institutions, a ray of hope seems to be shining on Bulawayo again.

Prospects of a revived industry are back after years of hopelessness following mass company closures and job losses.

The national railways has so far taken delivery of 108 wagons, seven locomotives and eight passenger coaches sourced from South Africa.

The equipment was purchased under the $400 million recapitalisation deal the parastatal has concluded with a consortium led by the Diaspora Infrastructure Development Group (DIDG) and South Africa’s Transnet.

The deal will see investment taking place in track rehabilitation, acquisition of locomotives, wagons and information communication technology to enable the parastatal to increase freight volumes.

More wagons and locomotives are expected to be delivered at the end of this month under the same deal.

Meanwhile, the National Social Security Authority (NSSA) is expected to release money to CSC within the first half of this year.

Last year, NSSA announced its intention to invest $18 million into CSC after the government approved the transaction, which would see the authority acquiring an 80% stake in the country’s beef processor and marketer.

Government will remain with 20% shareholding.

The revival of CSC will go a long way in improving the economy through beef exports and unlocking value in the livestock industry.
The same goes for Ziscosteel.

Government is working on modalities to resurrect the iron and steel giant Ziscosteel, within the first 100 days of Mnangagwa’s presidency.

Chinese firm R&F is expected to pour in $1 billion into the company, an investment which is expected to change the fortunes of Redcliff town, officials say.

Ziscosteel’s revival will trigger growth in Hwange Colliery Company Limited, NRZ and other suppliers.

Besides the revival of these parastatals, the City of Bulawayo is set to get more facelift from the development of a $60 million shopping mall at Basch Street bus terminus.

The refurbishment, being carried out by South Africa-based civil engineering firm, Terracotta Construction Private Limited, will see the terminus handling at least three million travellers each month.

It will include a transport hub located on the Basch Street ground level, retail sections and visitor parking bays.

The work on the multi-million project is expected to kick-start in March.

Local businessman and industrialist Delma Lupepe said the revival of NRZ, CSC and Ziscosteel would lead to the resuscitation of many companies in and around the city within three months.

“I’m certain that you will see a few or maybe half a dozen of those companies that were closed opening within the next three months.

Merspin is certainly one of those, which will be fully and actively operational within the next three months,” Lupepe said.

Bulawayo-based economic analyst Reginald Shoko said: “There is hope in the revival of the Bulawayo industry purely on the basis that most companies were created around the NRZ and Ziscosteel and with the current efforts in the revival of those giants coupled with the measures taken to open CSC the hope is not misplaced,”

Shoko said if government could continue sending positive signals in its policy issues around investment and economic fundamentals, economic revival in the city was guaranteed.

Confederation of Zimbabwe Industries Matabeleland Chapter president Joseph Gunda said a number of companies in Bulawayo had started investing in new equipment and increased production volumes since last year.

“Production volumes went up in 2017 in a lot of manufacturing companies mostly in Bulawayo although average capacity utilisation went down slightly countrywide,” Gunda said.

“Some of our companies managed to invest in new equipment, thus enhancing their quality and delivery competitiveness and contributing to increased production volumes.”

To keep the momentum going, Gunda said government should address the issue of foreign currency shortages to enable industry to import necessary raw materials.

He said funding should also be made available for re-tooling as most manufacturing firms were using antiquated equipment.

A clear policy, Gunda said, should be set out by government on the criteria of foreign direct investment that Zimbabwe needs at the moment.

“Foreign investors should set up production factories locally and not be allowed to establish warehouses of imported products that local companies can manufacture. This is critical to ensure that we both produce on a level playing ground (under same operating conditions) and avoid reversing the gains achieved so far through protection which has seen volumes and capacity utilisation in a lot of companies going up,” he said.

“We need to consolidate these gains and avoid closure of local companies and prevent Zimbabwe from sliding back into a dumpsite for cheap imported products or a supermarket of other nations’ products.”

A recent survey conducted by the Industry and Commerce ministry in conjunction with CZI, established that a number of companies in the country’s second largest city had started showing signs of recovery while others have already started servicing export markets.

Companies such as Treger Group of Companies, United Refineries, Merspin Founders, Datlabs, Blue Ribbon, Merspin, Arenel Biscuits and General Beltings, Rubber Products Manufacturers, Proton Bread, Ref Air, PPC Zimbabwe, Rubber Products Manufacturers, Bottom Armature Winding, Archer Clothing Manufacturers and Shepco Group, which acquired BMA Fasteners recently, among others have started showing signs of recovery.

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