Another Kwekwe-based company on the brink of collapse

via Another Kwekwe-based company on the brink of collapse | SW Radio Africa by Mthulisi Mathuthu on Tuesday, February 25, 2014

Yet another Kwekwe company is facing collapse after it lost the bulk of its business due to the closure of a major mining concern in the Midlands city, reports said Tuesday.

Zimchem Refineries lost 75 percent of its business due to the collapse of Ziscosteel in 2008 and has never fully recovered. Ziscosteel used to supply Zimchem with coal tar which is used to manufacture chemicals like benzene and creosote. The steel giant also used to produce tar that is used in road construction.

A NewsDay report quoted Zimchem CEO Ben Mashangu confirming the development. Mashangu said after the collapse of Ziscosteel his company was left with only about 25 percent of its core business, which is sustained by coke from the Hwange Colliery and other imports. Mashangu added that Zimchem was failing to meet the local demand for creosote oil forcing timber industry players to import the product. Creosote oil is used to protect wooden products against rot and decay.

Ziscosteel, once the backbone of the local steel industry, was closed in 2008 due to mismanagement, corruption and obsolete infrastructure. At its height of production the steel giant had a workforce of over 5,000 and was a major producer of both iron ore and steel supplying the region and Europe.

Now operating under the name New Zimbabwe Steel, the company was expected to re-open in January, but that did not happen. Settlement Chikwinya, the MDC-T MP for Mbizo, said as long as the steel giant remained shut Kwekwe will continue to decline.

Chikwinya said when he approached the Minister of industry and commerce, Mike Bimha, on the issue two weeks ago the minister was ‘non committal.’ The Mbizo legislator added: ‘He said he did not want to divulge any information because it was going to lead to anxiety.’

Chikwinya said the deterioration in Kwekwe was apparent with youths resorting to prostitution, gold panning and other risky activities. Chikwinya said in the last two weeks four people involved in gold panning had died in separate incidents after mine shafts collapsed on them.

Kwekwe is faced with high employment rate following the closure of many major and small companies there. A fortnight ago Zimbabwe and Alloy Smelting Company (Zimasco) announced plans to retrench half of its three thousand workers in an attempt to streamline costs.

Residents who spoke to SW Radio Africa said thousands of families stood to be affected by the impending lay off at Zimasco. Almost all the households in suburbs like Chigago, New Town and Fitchlea, are directly dependent on the company.