Gloomy economic outlook as Zimasco shuts down

Edwin Moyo.

KWEKWE-As the cost of doing business in the landlocked country continue south bound one of the biggest manufacturing companies in the Midlands Province has thrown in the towel.

could not continue and has shut down throwing hundreds of families into poverty.

Ferrochrome producer, Zimbabwe Mining and Smelting Company (ZIMASCO) has shut down four of its six furnaces at its Kwekwe plant and this has thrown hundred s of families into poverty as it cites high power costs and depressed international prices.

The shutdown comes a week after the country’s biggest shoe maker, Bata Shoe Company threw 106 workers into the streets last week over wage issues as the economy faces collapse.

Ferrochrome an alloy used in the production of stainless steel this year saw a decline in its prices in August and September 2023 on the trade markets globally.

ZIMASCO’s general manager, Namatai Mapfumo said only two furnaces were left operational.

“The company has temporarily closed four of its six furnaces and in the meantime, we are running two recently upgraded furnaces which are more power efficient.

“The reasons of switching off the four furnaces were necessitated by increased cost of electricity over cost of the product on the international market where ferrochrome prices have declined.

“For these reasons, we saw it fit to halt production from our older less efficient furnaces and we are taking this opportunity to carry out important maintenance on the four furnaces while we negotiate with the national power utility company towards more favorable power tariffs,” he said.

Mapfumo however said engagements were underway with stakeholders to foster a way forward.

” We are in the process of negotiating with various stakeholders to find long-term solutions. Given the current power cost, coupled with a depressed global market we found it as noble to switch off the four furnaces,” he said.

“The development brings to the fore the need to formulate a special tariff for chrome producers who consume a lot of power for production.” he said.

ZIMASCO closed its Eastern plant in 2022, a move which left  its other plant running Sinosteel’s mining unit in a compromised situation.

Meanwhile ZIMASCO was currently running at a low operational a situation which was worsened by the national power utility ,ZESA , load shedding and tarrif increase which further led to the downfall of the plant.

The ongoing economic challenges however continues to cripple the operations of industry in Zimbabwe, forcing major companies to align operations to the prevailing national market trends

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