The Zimbabwe Iron and Steel Company (ZISCO) is strengthening corporate governance systems to enhance its attractiveness to investors, a Cabinet minister has revealed.
Industry and Commerce Minister Dr Sekai Nzenza, told The Herald Finance & Business that board compact and charter was signed and all corporate governance, performance management and loss control systems were now in place.
A forensic audit was underway while an internal auditing function has been set up for the group and subsidiaries including Lancashire Steel, ZimChem and Buchwa.
“ZISCO is going ahead with the two pronged approach of engaging local investors for the low hanging fruits and at the same time
soliciting for external investors for the total resuscitation of the company,” said Minister Nzenza.
“The short-term thrust for ZISCO has seen the solidifying of the ZISCO’s group human capital.
“The significant departments such as finance, human resources, administration, security, marketing and legal have been restructured to meet the new challenges for the full resuscitation of ZISCO. Lancashire Steel and BIMCO are on the hunt for new general managers to lead the short to medium term transformation of ZISCO.”
The iron and steel industry remains crucial for economic growth and development as it has major spin-offs to other industries upstream or downstream.
It supports the energy sector through its high demand for energy inputs; the mining sector by providing raw materials such as ore and limestone and the manufacturing sector by supplying raw materials.
The Government is already developing a strategy to build capacity throughout the value chain of the iron and steel industry.
Since 2006, several offers for ZISCO were made by global steel giants including Essar Holdings, Jindal Steel & Power and Global Steel Holdings of India, but all collapsed partly due to lengthy approval processes.
A major foreign currency earner before independence in 1980, ZISCO hasn’t produced since 2008 and its demise is largely blamed on mismanagement and lack of funds to upgrade the aging equipment.
The plant had the capacity to produce one million tonnes of steel per year.
“The Government is focused on resuscitating ZISCO through various strategies that entail use of technology and innovation as well as harnessing inward opportunities for organic growth while working closely with local and external investors.
“This will be done through courting new investors who will bring technology and skills transfer to ZISCO,” said Dr Nzenza.
ZISCO is 91 percent owned by the Government.
The remaining 9 percent is held by Louth Minerals SA (3 percent), Tonexin Investments (2,8 percent), Stewarts and Lloyds (Overseas) (1,76 percent), Franconian Investments (0,81 percent), Amzim Limited (0,75 percent) and Zambia Copper Investment Limited (0,13 percent). Herald