Engineering, iron and steel sector eyes US$6bn by 2026
THE Engineering, Iron and Steel Association of Zimbabwe (EISAZ) is targeting to generate US$6 billion annually from exports by 2026 underpinned by the new US$1,5 billion steel plant in Manhize, expected to come on stream next month.
A Chinese firm, Dinson Iron and Steel Company (Disco), which is owned by Tshingshan Holdings Group Limited, one of the world’s largest stainless steel producers, is constructing an integrated steel plant in Manhize, near Mvuma, at a cost of US$1,5 billion.
The project, touted to become Africa’s largest integrated steel plant is expected under the first phase to produce 600 000 tonnes after which output will gradually increase to 1,2 million tonnes in the second phase and 2,4 million tonnes in the next phase. This will reduce the amount of steel the country imports, which stands at nearly half a billion United States dollars.
EISAZ secretary general Matthias Ruziwa told The Herald Finance & Business that last year, they launched a sector strategy whose vision is to be a vibrant, dynamic, and competitive industry driven by smart and strategic value chain linkages.
He said the strategy that runs up to 2026 seeks to guide players in the industry towards boosting operational capacity, production efficiency and employment creation in light of the imminent opening of the US$1,5 billion Disco project.
“Remember we launched a sector strategy on May 22, 2022, so we have actually put in place a strategic leadership association known as the Strategic Leadership Association for the Zimbabwe Engineering, Iron and Steel Industry (SLAZEISI).
“This is a strategic leadership association for Zimbabwe’s engineering, iron and steel industry and the strategies being pursued include strengthening of support and sector representation.
“Through SLAZEISI we are looking at smart and strategic value chain linkages that fully embrace adaptive and smart technologies to locally produce word-class value-added engineering, iron and steel products and services, thereby generating US$6 billion annually and employing 50 000 people by 2026,” said Mr Ruziwa.
“We are also looking at the creation of a dedicated funding facility and if we have a dedicated funding facility, it will help fund and attract value chains in the sector.”
According to EISAZ, the sector requires at least US$10 million for retooling to boost operational capacity. He said the issue of antiquated machinery and equipment has been a major cause for concern over the past few years.
“If you go into the industry, you will obviously notice that most of the equipment and machinery being used are almost over 30 years of age, and CZI (Confederation of Zimbabwe Industries) has repeatedly said this in its annual manufacturing sector survey report that industry needs new equipment. That also dovetails with the requirements of the 4th Industrial Revolution, so digital transformation is key to the resuscitation or revival of this sector, especially in light of the coming of Disco.
“Going by statistics that we have in other value chains, for a start, an amount not less than US$10 million for this sector (engineering, iron and steel) might be reasonable,” he said.
“And the industry value chain has had some assistance to the tune of US$10 million from the Government through the Ministry of Finance, Economic Development and Investment Promotion, so we are equally of the view that if we get an amount of that range, it should really assist in terms of bring in new equipment and machinery.”
Following the closure of Zisco, once the biggest steel plant north of Limpopo, in 2008 at the height of hyperinflation, Zimbabwe is spending US$1 billion annually importing steel and related products from countries such as South Africa, India and China.
The Southern African country consumes 1,5 million tonnes of steel per annum.
EISAZ has hinted that the sector presently imports 90 percent of all key raw materials and it is anticipated that the coming on board of Disco would do away with the country spending US$1 billion+ annually importing steel and related products.
Meanwhile, SLAZEISI will host its inaugural Annual Business Leadership Summit in Victoria Falls later this month.
“SLAZEISI is hosting its inaugural Annual Business Leadership Summit at Elephant Hills in Victoria Falls from the November 19 to 22, 2023. This event is not exclusive to the engineering, iron and steel sector, but brings a diversified array of speakers and delegates from across all sectors of the economy.
“Participants include representation from the Government, the private sector, stateowned enterprises, industry regulators and the academic fraternity.
“This Business Leadership Summit also feeds into the country’s development agenda, through its theme, ‘Shaping the future of business leaders in Zimbabwe towards the achievement of national aspirations.’ Thematic areas in focus during the summit include deliberations on emerging leadership and corporate governance trends, the role of women in leadership, value chains for national development, energy sustainability and an assessment of the status of Zimbabwe’s manufacturing sector,” said Mr Ruziwa.