Power cuts hamper production at ZimChem

THE disconnection of power supplies by Zesa from the defunct steel manufacturer, Ziscosteel, is crippling the operations of chemical producer, ZimChem Refineries, which is recording losses owing to non-production.

The power utility cut off power supplies from the giant steel company earlier this month over a ZW$40 million debt.

Zisco uses the same power supply line with its subsidiary, ZimChem, as well as Redcliff Municipality and Bimco, which have been hard hit by the development.

Speaking during a tour of the plant by the Minister of State for Presidential Affairs responsible for monitoring and implementation of Government programmes, Dr Joram Gumbo, on Wednesday, ZimChem acting general manager, Mr Tendai Shoko, said the company has been failing to meet customer demands.

“We have been negatively affected as a company by the power cuts as we have been failing to meet customer demands,” he said.

“We got a deal where we are supposed to export about 480 000 tonnes of pitch to South Africa but we have since failed to meet the demand and we have lost about US$150 000 to date.

“We were supposed to be supplying the same amount every month but due to these power cuts, we are failing to meet the demand,” said Mr Shoko.

He said the company only managed to export 120 000 tonnes as well as meet local demand.

“We have been severely affected as our customers have been financing themselves and we would buy raw materials and produce their goods.

“As we speak, our customers are frustrated as we have failed to deliver. We are hoping that the visit by the minister will help us have power restored so that we can start producing,” he said.

ZimChem has been relying on hired generators to run their tar refinery plant, which requires about $1 million per week.
ZimChem was roped in by the Government under the 100-day project cycles under the National Development Strategy 1 and is earmarked for funding to start producing tar for the Emergency Road Rehabilitation Programme (ERRP).

Dr Gumbo said the Government will offer necessary assistance to ZimChem.
“It has been brought to my attention that ZimChem is facing a myriad of challenges.

“These challenges range from failure to secure raw materials, an improperly constituted board of directors, lack of operational capital, periodic disconnection of power by Zesa and failure to obtain tax clearances from Zimra,” he said.

“I would like to assure you that the Government will offer the necessary assistance including mobilising the requisite resources for the capacitation of ZimChem,” said the minister,

He said ZimChem was deliberately chosen under the 8th 100-day cycle because of its potential to boost business in other sectors of the economy.

“As you are aware, ZimChem Refiners produce industrial chemicals and one of the major products is tar. I have been told that the company is on a drive to increase capacity utilisation from below 10 percent to around 20 percent.
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“The major activities are thus centred on the production of modified road tar for use in the road rehabilitation programmes and the supply of creosote to timber processing companies,” said Dr Gumbo.

“There is no doubt that the production plant will boost production and impact positively on that national programme of road rehabilitation.”

Minister Gumbo said it was Government’s desire to see the resuscitation and expansion of industries countrywide.
“Government will take deliberate efforts to support the iron and steel and general engineering industry in order to achieve increased availability of locally produced iron and steel products and increased processing of scrap metal,” he said.

“Of particular interest to the Government is the giant Ziscosteel, which was one of the biggest iron and steel producers in Africa. Government is working tirelessly towards the resuscitation of this strategic entity,” said Minister Gumbo.-The Chronicle