The Herald (Harare)

Zimbabwe: Bulawayo Rising Again

After revelations of more than $860 000 worth of new investments approved by the Zimbabwe Investment Authority in February only, Sunday Business tracked the investors who said the city had potential to become a huge industrial area.

They said if Government declares the city a special economic zone, more investors were likely to flock into the city and chances were high that they would thrive.

Some of the new investors in Kelvin West industrial area said contrary to belief Bulawayo was not dead and manufacturing was taking a turn for the better. Although certain companies had closed shop in the city and set up offices in Harare, operations were still done in Bulawayo where proper structures were erected.

A representative of Primetone Enterprises from Pakistan, Mr Sawab Khan, said Bulawayo was an attractive investment destination as it was near the ports, easier to access certain raw materials as well as having a lot of space to set up manufacturing plants.

"Bulawayo is the best place to do our foundry business as scrap metal is cheap and easy to get. There is plenty of space here and we are looking forward to telling fellow Pakistanis to join us and do business in Bulawayo," said Mr Khan.

Primetone Enterprises which specialises in recycling scrap metal to make steel rods is still under construction with the investors having spent about $4 million in equipment and construction of administration offices. It will create employment for 240 people operating on a three-shift basis, excluding skilled manpower.

A local partner for the company Mr Paxton Nyoni said the manufacturing plant was almost complete.

"The water cooling pumps, transformers, feeder pumps, furnaces and purification plant are already in place. We are supposed to have started operating in February but we are waiting for engineers from India to commission the plant," said Mr Nyoni.

Describing the process that the plant will engage in, Mr Khan with the assistance of Mr Nyoni all scrap metal would be processed and put in billets then put into the rolling plant where they would be melted and moulded into steel rods.

They said the plant would use about 80 tonnes of scrap metal per day which they acquire from mines.

"For water, we have already sunk two boreholes and we are confident that our products will compete well on the market. When the situation was bad in 2007-8, people were desperate for cheap products but now everyone wants value for their money," said Mr Nyoni.

Mr Nyoni said what was affecting most companies in Bulawayo was the lack of proper management and urged businesspeople to run their companies professionally and help revive Bulawayo.

Meanwhile, China remains the biggest source market with the largest share of foreign investors in the country according to ZIA.

Panellink Manufacturing representative Mr Guo-Yong Wei said as foreigners they had hope and declared that Bulawayo was alive hence their stay in the city.

"We have heard talk of declaring the city a SEZ and to our knowledge this will help businesspeople as well as attract more investors as certain policies will be put in place to support companies," said Mr Wei.

He said as businesspeople they had come up with ways of reducing costs in order to survive and that a lot of Chinese investors were keen to invest in the city.

Responding to what drew him to Bulawayo, Mr Guo-Yong Wei said manufacturing costs in the city were lower and resources were readily available and that the Bulawayo City Council had a lot of land where manufacturing plants could be built.

"We are investing in new equipment and advanced technology to increase production and because of the multi currency regime in Zimbabwe, we find ourselves on the same level with other countries. Bulawayo is not dead, that is why we are still here and bringing in more investors," he said.

He said the challenge was, however, in cheap imports especially in the textile industry but with the new SADC import regulations they hoped it would be good to promote local businesses.

Although SADC countries have pushed to liberalise trade among its member states, it is working towards introducing measures to curb the influx of goods from non-members that are being imported by some companies who repackage them and label as if they have originated from within the trading bloc.

The companies then export the goods and enjoy trade incentives when in fact the goods did not originate from SADC.

SADC is coming up with a water-water tight Certificate of Origin that has details that can trace where the products were manufactured.

For the certificate to be approved, exporters must submit SADC Certificate of Origin form, Customs Declaration, Export Invoice, appropriate certified costing for valued added requirements and any other documents that may be required by respective Customs departments.

Panellink manufacturing employs between 30 and 100 workers on different terms namely permanent, contract and temporary workers depending on demand for their steel products. The company also recently acquired a new furnace to scale up capacity.

According to the ZIA Bulawayo office, a number of new investment projects were approved in the Matabeleland region in the manufacturing and mining sectors as well as in tourism and opportunities were also available in agriculture and services sectors.

Apart from the proposed Special Economic Zone, the Bulawayo City Council has come up with a number of incentives to promote investment in the city.

Some of the incentives include the reduction of annual charges for businesses by 40 percent.

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