Manhize can now jump start local heavy industry

MANHIZE, the home of the steelworks being built by the Dinson Iron and Steel Company, will become a major industrial centre in Zimbabwe and so the planning needs to be done right, as such towns and cities can become a blot on the environment and most unpleasant to live in if they are allowed to grow higgledy-piggledy.

This has now been taken into account with a proper master plan drawn up, that allocates the required land for the present phase of the Disco works and the future phases, but ensures that the residential areas for the workforce, their shops and schools and health facilities and other urban facilities are properly sited environmentally.

But while Manhize will start off as largely a “company town”, with the main employer being Disco, right from the very beginning there will be others moving in.

Disco, for example, is highly unlikely to want to open shops and bars, or sell workers cars or to be the backbone of the retail and service economy. So Zimbabweans will be moving in almost from the beginning and doing their own investing, admittedly on a small scale.

But there will be opportunities for much larger Zimbabwean investment.

Disco wants to make steel, starting this year with steel billets and then as the steelworks expands looking at the top tier of steel products, mainly rod and sheet products, which are usually now made by the steelmakers as they are part of the output from the blast furnaces, rather than being made from steel billets by other manufacturers.

But that still leaves a lot of steel products that do need extra processes, plus of course the many things that are made from steel sheet, steel rods and steel billets. And a large area has been set aside in Manhize for the required heavy industrial sites.

Zimbabwe has a reasonably well developed secondary industry and a well-developed tertiary industry. But there is very little primary or heavy industry and since steel making ended around 20 years ago there has been almost nothing in the way of foundry industry that once used to be a big part of Kwekwe, but also was important in the Bulawayo and Harare heavy industrial sites.

Although economists in developed countries see industrial growth in those parts of the world as being dominated by high-tech industry and the like, “metal bashing” industry still needs to be established across a wide swathe of the developing world.

It is all very well talking about what comes later, and in the case of Zimbabwe these industries can easily be grown at the same time as the heavy industry, but there has to be this heavy industry.

Some of this heavy industry can be developed by external investors, and they will be welcome, but a lot can be developed by Zimbabwean engineering entrepreneurs who have good ideas and can obtain financial backing from investment houses and shareholders.

And here we do need to start doing a lot more to link those with the money with those with the engineering skills and ideas.

Even without some of the downstream manufacturing the Manhize steelworks and other existing and planned investments will make a huge difference to Zimbabwe. To take the construction industry as an obvious example, all the cement, bricks and very soon the steel reinforcing and roof sheets will be made in Zimbabwe.

Already door frames and window frames and other products are made in Zimbabwe, from imported steel and other raw materials, but obviously these will soon be 100 percent Zimbabwean. We are already accelerating our building programmes, both of finished flats and houses and of ordinary people building their own homes, and when everything can be bought instantly from a Zimbabwean supplier obviously costs can fall and work can be accelerated.

But we also need to look at what goes inside those flats and houses when they are built. Already the general furniture is locally made, although steelworks can join the managed forests to make sure all the raw materials are also local.

But that still means that things like stoves and fridges are largely imported, or are just assembled locally from imported parts and materials. Having the steel sheet and the rest means that local manufacturers can make stuff that is fully Zimbabwean.

A lot has been spoken about the upsurge in experts as Disco goes live, and this is important.

In fact one of the reasons Disco’s Chinese owner, Tsingshan Holdings, wanted to invest in Zimbabwe was not just the new investment climate that made this possible, but the fact that most of the raw materials needed could be mined very close to Manhize, and even the coke could be produced from Zimbabwean coal at Hwange.

With Zimbabwe an enthusiastic member of the Africa Continental Free Trade Area, the Manhize works easily qualify as total African content, and so Africa’s largest single steelworks, which Manhize will be when all phases are complete, will be able to export around the region and the continent without attracting duties and meeting other barriers.

But at the same time Zimbabwean industry and Zimbabwean businesses need to be major customers of Disco, taking advantage of the steelworks right inside our own borders, in a fairly central location and now with a new town and future city arising out of the veld.

Of course some of what are described as the “downstream products” can also be exported, and will also move freely within AfCFTA since they will be made from Zimbabwean steel inside Zimbabwe, and so easily meet the local content rules.

So far the imagination of many industrialists does not seem to have been lit up by the realisation that there will shortly be a very large steelworks right on their doorstep, and that the creation of a Zimbabwean heavy industrial base is now possible.

We are sure that we have some smart innovative engineers who can lead us into this industrial world, and we now need to work out how we can combine them with investment to make our dreams become reality.