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Lovemore Zigara Midlands Correspondent
REDCLIFF based Steelmakers is seeking $3,5 million in the short to medium term to double production at its plant.
The firm’s production level has remained static at 36 tonnes per annum since it commenced operations in 1998.General manager, Alexander Johnson said delays in increasing output had been pinned on the belief that New Zimsteel would begin production for the supply of some of the raw materials.

“The reason for not expanding was due to the belief that Ziscosteel (New Zimsteel) one day would come to life, which would supply us with the input required for the downstream processing. This hasn’t happened and we’ve always been producing below the break-even point of operations, which has resulted in the company incurring continuous losses over these years,” he said.

“Any further losses will cripple operations and the company may become insolvent. It’s with this background that management decided it couldn’t wait any longer for Zisco’s revival, but to carry on with a moderate expansion project that could allow the company to produce at break-even levels and by so doing arrest any further losses.”

The company needs $3,5 million to expand said Johnson who complained over lack of credit lines to implement the project.He said the only option is to obtain funding by luring investors in return for equity.

“Local banks don’t have either the capacity or the willingness to take risks in lending for such projects, which are long term in nature. The cost of borrowing from local institutions is also very high and sometimes not viable. To raise the required capital we would also consider local and foreign investors in equity participation,” he said.

The expansion project is expected to usher in new technology that will go a long way in reducing overhead costs through bypassing the conventional and expensive methods of production.

The Redcliff based company converts finished steel to various shapes and supplies engineering, agriculture, motoring, mining, construction and manufacturing industries.