Source: Sino secures funding for $50m tile and brick plant – Sunday News Mar 5, 2017
Munyaradzi Musiiwa, Midlands Correspondent
GWERU-BASED cement manufacturing company Sino Zimbabwe Cement has secured funding for its brick and tile manufacturing plant which was stalled in 2016.
The Chinese government through its parastatals, China National Materials Group Corporation (Sinoma) and of China Building Materials Corporation (CBMC) which owns a controlling stake in Sino Zimbabwe Cement Company (SZCC) had committed to set up a $50 million brick and tile plant construction. The project, which is a joint venture with the Industrial Development Corporation of Zimbabwe (IDC) should have kicked off last year but financial constraints have hampered the project.
Completion of the project was supposed to be at the end of 2016. SZCC managing director, Mr Wang Yong told Sunday Business that the cement company had courted a new Chinese investor with whom they are finalising the agreement.
Mr Wang said the company was looking forward to sealing the deal with the Chinese company, which could not be disclosed for fear of jeopardising the negotiations, which will see the investor committing over $50 million for the construction of the plant which is expected to create 200 jobs.
“We have a new investor whom we are negotiating with so that they can fund the project. We are looking forward to sealing the deal by end of this month and construction of the plant will subsequently follow. The project will be in three phases and the first phase will cost about $20 million. We are looking forward to producing 60 million bricks a year. The whole project is going to cost $50 million,” he said.
Sino Cement Zimbabwe is operating at 90 percent capacity and is looking forward to scaling up production. The company has a workforce of close to 400.
Meanwhile, the company lost about 50 percent of business since the beginning of the year as compared to the same period last year due to incessant rains being experienced across the country.
The company, a joint venture between the Zimbabwean and Chinese governments has projected a further decline in sales in this quarter which has been attributed to many variables, among them the liquidity challenges which has continued to bedevil the economy.
Mr Wang said the dire situation has been exacerbated by the smuggling of cheaper cement, mainly coming from South Africa.
“We have recorded low business since the beginning of the year because of the heavy rains the country has been receiving. It means there is minimal activity taking place in the construction industry hence the low uptake of cement. We also have other factors which are already prevailing in the economy which include the cash shortages and the continued smuggling of cement products mainly from South Africa.”
“Compared to the first two months of last year our sales have gone down by 50 percent and judging by reports we are still going to experience more rains this month (March) and therefore sales will still be depressed,” added Mr Wang.