Business / Local
'Zisco, NRZ to spur Bulawayo revival'
25 Apr 2014 at 07:05hrs | Views
THE resuscitation of the defunct Ziscosteel and the tottering National Railways of Zimbabwe (NRZ) will spur the revival of ailing and closed companies in Bulawayo, a Cabinet minister has said.
Speaking during the Alpha Media Holding (AMH) Conversations series yesterday which runs concurrently with the Zimbabwe International Trade Fair (ZITF), Industry and Commerce minister Mike Bihma said the sleeping steel giant as well as the NRZ were key to Bulawayo's revival.
He was quick to add that while government was moving with speed to engage Essar to revive NewZim Steel, some closed firms would not be able to reopen.
"If you want to restore Bulawayo back to being the industrial hub of this country again, you have to look at the factors that led to this situation.
"Zisco has a lot to do with industries in Bulawayo and with Zisco closing down, all those companies that relied on Zisco also fell by the wayside.
"Scores of firms that had synergies with Zisco collapsed, but government is putting efforts to revive Zisco, which is now NewZim Steel, and we are almost there since it's a big investment," Bimha said.
Official statistics show that nearly 100 firms have closed shop in Bulawayo, with several others relocating to the capital to remain afloat.
An estimated $8 billion is required for revival as it emerged the fund meant for resuscitating distressed industries has failed to give them a new lease of life.
Bimha added that there was urgent need for government in conjunction with the business sector to identify key industries that must be given top priority for revival.
The meeting was held under the theme Bulawayo Open for Business and was also attended by Small and Medium Enterprises minister Sithembiso Nyoni.
Essar Holdings in 2011 signed a $750 million takeover deal for one of Africa's largest integrated steel works, which subsequently changed its name to NewZim Steel.
But the Indian firm has not started operations due to failure by government to release iron ore mining claims which were part of terms for the takeover agreement.
When the deal was signed, Zisco had a foreign debt of $300 million and domestic liabilities amounting to $72 million.
Bimha further said NRZ was key to the revival of Bulawayo industries.
"There was also a linkage between Zisco and NRZ as 60% of the cash flow of NRZ had to do with movement of goods to and from Kwekwe.
"So with the NRZ ailing, it also meant industries in Bulawayo collapsed. I have been getting information from the relevant ministry (Ministry of Transport and Infrastructural Development) that they are sure of investors who want to come on board to assist in the rehabilitation of NRZ.
"If you have NRZ and Zisco back on track, it indicates that Bulawayo industries will be revived," Bimha indicated.
However, the minister ruled out all closed firms in the city being revitalised due to advanced ageing of equipment and competition.
"Competition is here to stay and some firms won't manage to revive. But our role together with the business sector is to identify those companies that are of strategic importance to the region and give them first preference."
Speaking during the Alpha Media Holding (AMH) Conversations series yesterday which runs concurrently with the Zimbabwe International Trade Fair (ZITF), Industry and Commerce minister Mike Bihma said the sleeping steel giant as well as the NRZ were key to Bulawayo's revival.
He was quick to add that while government was moving with speed to engage Essar to revive NewZim Steel, some closed firms would not be able to reopen.
"If you want to restore Bulawayo back to being the industrial hub of this country again, you have to look at the factors that led to this situation.
"Zisco has a lot to do with industries in Bulawayo and with Zisco closing down, all those companies that relied on Zisco also fell by the wayside.
"Scores of firms that had synergies with Zisco collapsed, but government is putting efforts to revive Zisco, which is now NewZim Steel, and we are almost there since it's a big investment," Bimha said.
Official statistics show that nearly 100 firms have closed shop in Bulawayo, with several others relocating to the capital to remain afloat.
An estimated $8 billion is required for revival as it emerged the fund meant for resuscitating distressed industries has failed to give them a new lease of life.
The meeting was held under the theme Bulawayo Open for Business and was also attended by Small and Medium Enterprises minister Sithembiso Nyoni.
Essar Holdings in 2011 signed a $750 million takeover deal for one of Africa's largest integrated steel works, which subsequently changed its name to NewZim Steel.
But the Indian firm has not started operations due to failure by government to release iron ore mining claims which were part of terms for the takeover agreement.
When the deal was signed, Zisco had a foreign debt of $300 million and domestic liabilities amounting to $72 million.
Bimha further said NRZ was key to the revival of Bulawayo industries.
"There was also a linkage between Zisco and NRZ as 60% of the cash flow of NRZ had to do with movement of goods to and from Kwekwe.
"So with the NRZ ailing, it also meant industries in Bulawayo collapsed. I have been getting information from the relevant ministry (Ministry of Transport and Infrastructural Development) that they are sure of investors who want to come on board to assist in the rehabilitation of NRZ.
"If you have NRZ and Zisco back on track, it indicates that Bulawayo industries will be revived," Bimha indicated.
However, the minister ruled out all closed firms in the city being revitalised due to advanced ageing of equipment and competition.
"Competition is here to stay and some firms won't manage to revive. But our role together with the business sector is to identify those companies that are of strategic importance to the region and give them first preference."
Source - newsday
