$6bn industrial park to bolster Sino-Zim ties
Lovemore Chikova in Qingdao, China
Qingdao Hengshun Zhongsheng Group, a Chinese multi-billion dollar firm, is on the verge of starting work to set up an industrial park in Zimbabwe. And if all goes according to plan, work on the major investment project, that is set to change the Zimbabwean economy forever, will start taking shape next year. This is good news for Zimbabwe, considering that the total investment the firm will bring at the industrial park will be nearly $6 billion.
Apart from the money flowing into the country, the industrial park is expected to increase export earnings and create the much needed employment both directly and indirectly. The industrial park will cover an area of around 20 000 hectares. The $6 billion investment cannot be taken for granted, especially if the country’s national budget has been pegged around $4 billion in the last few years.
And it seems the passing of the Special Economic Zones Bill by Parliament last week added more impetus for the realisation of the dream for a successful industrial park in Zimbabwe. The law is expected to become operational within a few weeks when President Mugabe appends his signature.
Qingdao Hengshun Zhongsheng Group is one of the firms expected to become the first to take advantage of the enabling law to start work on specialised economic zones in Zimbabwe. According to officials here, the actual site of the industrial park is yet to be determined, but it is known that it will be located along the Bulawayo-Gweru-Kwekwe railway corridor.
This will be strategic for the project in terms of being well-linked to both internal and external markets.
It is equally important that Qingdao Hengshun Zhongshen Group officials are optimistic about the success of the project. Briefing African journalists visiting Qingdao City on the Zimbabwean project, the firm’s president Mr Jia Xiaoyu said they were looking forward to a successful venture.
“Yes, Zimbabwe is our next important target for implementing an industrial park,” he said. “So, we got some developments towards the industrial park. “We are now planning to advance the Zimbabwe industrial park this year. So, we hope we can launch this product next year based on our political and economic exchanges.”
Mr Jia noted that one of the major motivating factor for the industrial park to be more successful was an environment of peace. “We think the political or development environment is very important to us in Zimbabwe,” he said. “We hope for an environment of peace and also we want to preserve the available professionals and talents in Zimbabwe.”
The industrial park will come with many other benefits that will accrue to the Zimbabwean economy. The Chinese firm will construct an electricity generating plant that will help power the industrial zone and surrounding areas.
The industrial zone will also consist of a non-ferrous metallurgy processing plant and will supply mining equipment. There will be production of agricultural processing equipment and supply of agriculture related products.
What this means is that the industrial zone will cut across some of the major economic pillars of Zimbabwe, like mining and agriculture. This will help the country move towards its goals of industrialisation, important for any modern-day economy. There are also prospects of the revival of the ailing railway system in Zimbabwe, which has been crying out for partnerships for a long time.
The railway system will be important for the industrial park to operate efficiently since there will be need to transport raw materials and finished products. In that pursuit, Qingdao Hengshun Zhongshen Group roped in China Railway Eryuan Engineering Group and Qingdao City Construction Investment Group as the major partners on the project. These firms will look into other areas related to the successful operation of the industrial park, especially the infrastructure.
Work at the industrial park will help provide answers to enhance beneficiation and value addition of minerals as envisaged by President Mugabe. The President has been at the forefront of calling for not only Zimbabwe, but other African countries, to beneficiate and value add their minerals before exporting them.
As the African Union chair and the Sadc chair last year, President Mugabe set the agenda for industrialisation, beneficiation and value addition for the two continental bodies. Apart from the industrial advantages of the park, Qingdao Hengshun Zhongshen Group will also set up a primary school, whose planning is already in motion.
The coming in of the Chinese firm is confirmation that Zimbabwe offers many opportunities for cooperation in major areas like mining, agriculture and tourism. The industrial park project was sealed when Vice President Emmerson Mnangagwa, accompanied by Minister of Industry and Commerce Mike Bimha, visited the firm last year.
It was during the visit that a Memorandum of Understanding was signed for the project to take off. Zimbabwe has been yearning for the building of infrastructure to aid its industrialisation ambitions and this project will provide some of the lessons and solutions.
The economic zone will provide a full industrial chain that will benefit both upstream and downstream businesses. The other major benefit will be the transfer of modern technology to Zimbabwe to help improve the country’s industrial production capacity. All the work to be carried out at the park will fall under the country’s sectors that are crucial to facilitate the much anticipated economic turnaround.
Qingdao Hengshun Zhongsheng Group is almost completing its industrial park in Indonesia, which will be a model for such future projects, including the one in Zimbabwe. The Indonesian park, called Hengshun Sulawesi Industrial Park, “integrates the business mode of coal, electricity, smelting, road and port for comprehensive service”.
It “highlights four functional areas including blast furnace and electric furnace nickel iron and smelting, logistics storage and work and residential areas equipped with facilities such as roads, a hospital, hotel and church”.
Just like in Zimbabwe, it is expected that the project will provide job opportunities, promote economic development and speed up the transformation of the Indonesian economy. It will be necessary that more projects of this nature come to Zimbabwe, since they help not only with the uplifting of the Southern African country’s economy, but also enhance cooperation with other countries.
The industrial park project is being run in line with Chinese President Xi Jinping’s pronouncement on the way forward in cooperation between his country and African countries. At the Forum for China-Africa Cooperation summit in Johannesburg last year, President Xi proposed a 10-point plan that will guide the economic and political relations between the two sides.
The 10-point plan straddles across areas that will help African countries realise quick economic turnaround and enhance their prospects for full industrialisation. China has helped transform its fortunes on the back of such industrial parks that have attracted unprecedented foreign direct investment.
That the Asian country is the second largest economy in the world after the United States is largely credited to its reform and opening up of the economy, which saw more foreign companies bringing investment.
According to Chinese expert on investment Mr Zhihua Zeng “the basic concept of Special Economic Zones includes several specific characteristics: (a) it is a geographically delimited area, usually physically secured, (b) it has a single management or administration; (c) if offers benefits for investors physically within the zone; and (d) it has a separate customs area (duty-free benefits) and streamlined procedures.”