Loan facility unveiled for foundry companies
The Industrial Development Corporation of Zimbabwe (IDCZ) has come up with a loan facility for foundry companies in a bid to revive the sector.
Recently, the IDCZ invited interested foundry companies to apply for loans.
The facility is part of the US$30 million the Ministry of Finance and Economic Development released to retool the industry.
This comes as several foundry and steel recycling enterprises have closed down due to a shortage of feedstock, high scrap prices and working capital constraints.
The enterprises, mostly in Harare, Bulawayo, and Midlands are helping to narrow the production gap left following the collapse of the local steel industry more than a decade ago.
From being a regional steel giant for years until the turn of the millennium, Zimbabwe turned into a net importer, squeezed by declining production and the subsequent closure of Zimbabwe Iron and Steel Company (ZISCO), once Africa’s largest steel firm.
This has led to the proliferation of steel recycling enterprises, with the potential of generating US$1,5 billion annually, but are having a hard time securing adequate scrap to feed the mills.
Zimbabwe has about 50 small to large foundry plants.
Zimbabwe Institute of Foundries (ZIF) chief operations officer, Dosman Mangisi, said the loan facility would go a long way in helping foundry companies to modernise their operations.
“The major challenge that foundry companies are facing in Zimbabwe is the technology gap,” said Mangisi. “Our metal casting technology is now obsolete and this affects our casting ratios and makes the country less competitive.”
The sector, which used to employ about 30 000 people, according to Mangisi supplies 60 percent of its products to mining companies while the remainder is largely consumed by agriculture and construction.
Last year, Industry and Commerce Minister Dr Sekai Nzenza confirmed the massive rebound of foundry and steel recycling industry, but highlighted that the major challenge was the shortage of scrap.
Egypt and South Africa are strong in automotive castings, making it easy for them to manufacture cars for their own. Egypt cast 75 percent of their local car parts and after service parts, all this is done in the metal foundry sector.-ebusinesweekly
