Zimasco downsizes operations

KWEKWE-based ferrochrome producer, Zimasco Private Limited is reeling under downward global market trends leading to the company’s move to implement cost cutting measures to remain afloat.The situation has been worsened by concerns over high power tariff, which makes it difficult for the business to break even, leading to the company switching off some of its furnaces.

Zimasco switched off four of its furnaces in November 2023 citing exorbitant power tariffs leaving only two furnaces operational. Zimasco chief operations officer, Mr Namatai Mapfumo, confirmed the global market trends were weighing heavily on the company’s operations, which is also laying off some employees as a result.

“Zimasco closed its old furnaces in November 2023 following a gradual market downturn. The old furnaces are open furnaces, which are inefficient in terms of power utilisation,” he said.“Given that power tariffs had significantly increased, running the old furnaces did not make good business sense and they were shut down in favour of running the upgraded semi-closed new furnaces 1 and 2.”

Mr Mapfumo said the upgraded furnaces were also not going to be viable under the new energy tariffs.
“The tariff issues were amicably resolved and Zimasco has continued to run its upgraded two West Plant furnaces and is in the process of commissioning the two new fully closed East Plant furnaces commencing with furnace 7 then followed by furnace 8,” he said.

Mr Mapfumo said the East Plant old furnaces were now in need of major re-lining work before they can be switched back on.
“Zimasco’s strategy is to upgrade these open furnaces into more efficient semi-closed furnaces,” he said, adding that Zimasco has not been spared by the slump in the global metal prices.

“As a result, management teams in the mining sector across the world are re-engineering their businesses in efforts to ensure viability through implementation of various initiatives to ensure sustainable cost efficiencies in the prevailing low price environment.

“Various key players in the industry have recently been in the news for cutting down their cost of labour. Zimasco also embarked on a ‘work cycle review’ process as part of implementation of lean management philosophy,” said the official.
During the review, some work cycles were re-engineered thereby rendering some positions excess to requirement, said Mr Mapfumo.

“As a priority, affected employees will, as much as possible, be seconded to the new furnaces that are being commissioned, depending on their skills set.“Employees that cannot be absorbed will be laid off through proper retrenchment procedure,” he said.-chronicle