Zisco has been in the doldrums for a long time and this state of affairs should not be allowed to continue unabated. An ailing Zisco has serious ripple effects in the downstream industries not only in Redcliff and the surrounding communities, but the entire country.
Once rated as the largest integrated steelworks in sub-Saharan Africa north of the Limpopo River, today Zisco is a shadow of its former self, a situation compounded by the crippling sanctions imposed on the country by the West.
Zisco at its peak is capable of producing between 700 000 tonnes and a million tonnes of steel a year. But the company is on its knees and is surviving on scrap metal, a situation which has had a negative effect on the economy.
We believe this is the time for decisive action by the Ministry of Industry and Commerce which must find the right partner for Zisco.
The fact that 15 companies have shown interest in partnering Zisco shows that there is a great potential in the company which should take its rightful position as one of Africa’s largest steelworks.
Yesterday we quoted the Secretary for Industry and Commerce Abigail Shonhiwa saying the response by companies interested in entering into a joint venture with Zisco had been very good, with five of the 15 interested firms having bought bid documents ahead of the deadline tomorrow.
She could not name the companies, but early this year AMSA and Jindhal Steel & Power, which had been shortlisted by an inter-ministerial committee adjudicating on the tender, had their bids thrown out by the Presidency on the grounds that the conglomerates were too big and were likely to dictate terms that suited them.
Everyone agrees that the only option to get Zisco back to normal operations is to get a partner who will inject money into the company to clear its debt. This is because it will be difficult, if not impossible, for Zisco to go it alone because of the $228 million debt hanging over the company.
Government cannot pump that kind of money simply because it does not have it. In fact, the Ministry of Industry and Commerce could not secure from Treasury the $50 million Zisco needed to repair blast furnace number 4 and ovens. Borrowing money from financial institutions is a challenge because of the debt problem.
Bringing in a suitor to resuscitate the operations of Zisco should therefore not be seen as selling the family silver, but as a way of rescuing the company from total collapse.