Industry grinds to a halt

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BY EDDIE CROSS

I went into a tyre dealer this week to have the front wheel alignment on
a truck checked. The staff were all sitting in the reception, the manager on
the forecourt and not a customer in sight. I was attended to and in 30
minutes was able to drive out with a much-improved steering performance on
the 8 tonne truck.

The Manager said to me: “We are so quiet that we wonder how much longer we
can carry on like this.” The city certainly was quiet – very little traffic
and I did not have to wait or queue anywhere. Great for me – not so great
for the business managers I was dealing with.

Yesterday, after leaving Hwange once the game count was over, we travelled
north to meet MDC leaders in the town of Hwange. This town is a large
rambling place, typical of company towns all over the world. Two geologists
working for Cecil Rhodes first pegged coal here in the late 1800’s. It has
three main reasons for being – the coal mines themselves, a large 840
megawatt coal fired power station built before Independence in 1980 and some
ovens used to produce coke and asphalt for the roads.

As we arrived and climbed the hill overlooking the mines and the power
station I immediately noticed that the power station was not working. No
smoke or steam from the stacks and the cooling towers. At the meeting I
asked a senior official what was happening? He told me the conveyor for coal to the power plant is broken down and they did not have sufficient equipment to keep the plant supplied by other means.

Now that is a disaster – to stop a coal-fired power station is an expensive
and wasteful exercise. They are designed to run continuously for long
periods, shut down only for major servicing and repairs. We also only have
the two main stations – Hwange and Kariba and these together are required to
supply the major part of our national requirements of about 2000 megawatts.
Take out the Hwange station and we are left with less than half our needs
even if Kariba is running at full capacity.

It goes beyond this of course. The mine has been unable to supply more than
a fraction of national demand for some time and a common sight is the large numbers of 30 tonne carriers standing waiting – sometimes for weeks – to be loaded. The coal crisis is so bad in fact that some large consumers are importing coal from South Africa. The coke ovens – a wonderful, simple and profitable business are also not functioning. They need major refurbishment and relining.

Then there is the Zimbabwe Iron and Steel Company. A plant built in the
midlands to process local iron ore into steel at the rate of about 100 000
tonnes of finished product a month. The equipment is state-of-the-art and
comparatively new. The South African Iron and Steel Corporation has been
eyeing this huge investment for years – they say it would fit in with their
own plants well and could be highly profitable. Indian steel magnates agree and some months ago a major Indian steel company was persuaded to take up a management contract at the plant.

They were promised the full cooperation of the State, although the people
negotiating the deal never discussed it with the Board or management. The
Indian team arrived with facilities for up to US$400 million in new
financing. They took up residence but within weeks they knew it could never
work. How do you run a plant like this in the middle of Africa with a
defunct railway system and no coal? After a futile visit to Hwange, the CEO
of the plant left the country with his money and has not come back. I can
understand why.

What astonishes me even more is that those responsible for this state of
affairs seem to be incapable of dealing with these situations in any sort of
coherent way. It does not take a rocket scientist to run these businesses.
They are relatively straightforward large-scale operations that require
sound management and maintenance. The skills are there – the money has been
invested and is available to turn these operations around. Those responsible
are just incapable of doing what needs to be done.

This year will be the last year of operation for the massive tobacco
processing plants in Harare – next year’s crop at about 20 000 tonnes or 10
per cent of the recent past, is just too small to warrant keeping the plants
in being. There may be some rationale for bringing in tobacco from the
region to process in Harare but the pressure is going to be there to move
the capacity to other countries – countries where a more rational business
environment exists.

Unilever is downsizing in Zimbabwe, Heinz is struggling to maintain their
investment. National Foods is down sizing after trying to hold their
operations together for some years. Most other firms are running on 30 per
cent of capacity – hoping for better days.

My own bakery is a small operation but it is closed at present – not for
price control reasons but because I do not have any flour. Today in Bulawayo
bread was very scarce and the larger supermarkets were selling “fancy”
loaves for Z$350 – substantially above the controlled price for the larger
conventional 700 gram loaf of Z$295. In my view this price is extortionate –
but that is what you get when you cannot keep the shelves full.

Fuel is selling at Z$1300 to Z$1400 a litre in Bulawayo and Harare and is in
short supply. People are bewildered by the prices and the shrinking value of
the money in their pockets. Customers in my own supermarket throw away the
smaller denomination notes as not worth carrying. The Z$1000 note has become
the most common note traded. Remember, that is a million in the old
currency!

Silent factories, empty streets, frustrated and scared shoppers. Where will
this all end? We now know that it will not end until Mugabe can be
persuaded that he has failed and must step aside for new leadership. Only
when that happens can we expect things to begin to improve. What a sad
situation where the man who once was the hope of a brighter future for all
Zimbabweans, is now a failed leader who is the main impediment to change and
recovery.