Local foundry sector suffers effects of poor power supply, obsolete machinery
DEPRESSED power supply and obsolete machinery are the major shortcomings to beset the local foundry industry once the US$1,5 billion steel plant in Manhize commences production, an official has said.
The project, which is being constructed by Dinson Iron and Steel Company (Disco) near Mvuma in the Midlands Province, is touted to be Africa’s largest integrated steel plant and is expected to be commissioned early next year.
At full throttle, the steel plant is expected to produce 1,2 million tonnes of steel annually with the first phase of the investment targeted to process 600 000 tonnes of carbon steel for local and export markets.
Since the closure of Zimbabwe’s largest steel plant, Zisco, in 2008, the country is spending US$400 million annually importing iron and steel, the critical raw materials used by the engineering sector.
The Zimbabwe Institute of Foundries (ZIF) chief operating officer, Dosman Mangisi, said while the coming on board of Disco would impact positively on raw materials availability, the shortcomings in the foundry sub-sector would be production inefficiencies.
He said these would emanate from antiquated plant and equipment that players in the foundry sector are using as well as the depressed power supply situation the country is facing.
“Disco operations will impact positively in terms of raw materials availability to the engineering, iron and steel industry and thus reducing the down time that companies, especially foundries, are going through when sourcing raw materials.
“But despite the positive knock on impact the Manhize Steel Plant will bring to the sector, the shortcomings of the local foundry sub-sector would be subjected to production inefficiencies compounded by obsolete equipment and subdued power supply.
“At present, there is a need to embark on a serious retooling programme as well as ensuring constant power supply in the country to guarantee improved production efficiencies when Disco commences operations,” said Mangisi.
On their side, to guarantee uninterrupted electricity at the steelworks, Dinson would be getting dedicated power supplies from Sherwood in Kwekwe.
The company is almost finishing constructing the 100-kilometre electricity transmission line to draw power from the ZESA substation in Sherwood to the steel plant.
Under the first phase, Disco requires 500MW and to supplement supplies from the national grid, the firm plans to develop three greenfield power projects with a combined output of 300MW.
The planned greenfield power projects involve Disco generating electricity using heat from the steel plant’s operations as well as wind and solar energy.
Mangisi said under the first phase of the retooling project, the foundries that have indicated the urgent need to re-equip their factories need a combined US$15 million while the entire sub-sector would need at least US$100 million.
“We have already approached the Government to have a package tailor made for the foundry sub-sector retooling programme.
“During the UDI (Unilateral Declaration for Independence) era in Rhodesia, foundries prospered because they were funded directly through banks and this is the same concept that we are engaging the Government for.
“In our preliminary discussions, we have observed that players in the sector require a congregated US$15 million under the first phase, but when the retooling project is rolled out across the sub-sector US$100 million is needed,” he said.