Iron and steel makers seek $20 million

Source: Iron and steel makers seek $20 million – The Standard May 6, 2018

THE iron and steel sector is negotiating with the Reserve Bank of Zimbabwe (RBZ) for a $20 million facility to source raw materials and new equipment.

BY FIDELITY MHLANGA

This comes as the sector is undercapitalised and also weighed down by obsolete equipment and foreign currency allocation nightmares.

Engineering, Iron and Steel Association of Zimbabwe president Austin Tigere told Standardbusiness on the sidelines of the launch of a Bystronic fibre laser cutting machine last week that his association has met with RBZ for a bailout.

The machinery is owned by Sawpower Blades.

“We met the deputy governor of RBZ [Kupukile Mlambo] looking for a facility to help us acquire new equipment and forex for raw material. We are looking for a three-year facility. RBZ proposed $20 million, but it’s not enough,” he said.

“They [RBZ] did not come up with a timeline as to when they can deliver. But they indicated that they would want a bank to administer that facility and the interest rate must be less than 10%.”

Tigere said a survey done by its National Employment Council showed that the sector required at least $60 million for retooling.

He said the sector was in need of a facility to keep it afloat and also ward off competition from potential foreign companies that might come to invest in response to the ‘Zimbabwe is open for business’ mantra.

Tigere said the sector needed to acquire efficient state-of-the-art equipment for it to compete at both regional and international level.

Officiating at the launch of the machine, Sawpower MD Ralph Stead said the machinery, which cost 200 000 euro, had the world’s best laser technology and software when it comes to laser cutting of metals.

“This latest up to date world technology is right here in Zimbabwe. Bystronic probably has the world’s best laser technology and software when it comes to laser cutting of metals. This brings enormous advancement to our manufacturing sector with the ability to produce items of extremely high and consistent accuracy at production time, which is a fraction of those taken in conventional metal manufacturing processes,” he said.

Laser cutting is a thermal process for processing sheet metal. The laser beam is created by the laser source, conducted by mirrors or a transport fibre in the machine cutting head where a lens focuses it at very high power on a very small diameter.

The company has been involved in the cutting business for over 20 years, but the use of fibre optics for transmitting the laser light is relatively new technology and offers a number of improved efficiencies over laser cutting and plasma cutting, especially in cutting mild steel, stainless steel and aluminum of up to 4 millimetres.
The technology was made available through collaboration with Swiss-based company, Bystronic Sales AG.

Industry, Commerce and Enterprise Development minister Mike Bimha said the machinery would go a long way in capacitating the iron and steel manufacturing exports thereby generating forex.

“However, I cannot go further without challenging the company to look into possibilities of exporting some of its products and start generating the much-needed foreign currency,” he said.

Bimha said government had availed incentives such as value-added tax deferment and duty rebate to companies that import state-of-the-art machinery.

“On its part, government is in support of companies such as Sawpower, which heed its call for improving efficiency and through determination the company has developed into a leading lawnmower, chain saw, brush cutter and blading supplier in Zimbabwe offering quality guarantees on products with back-up, maintenance, spares and training,” he said.

Sawpower has 45 employees with the number expected to rise with the coming-in of the new machinery.