GWERU – Zimbabwe Chemicals Refiners (ZimChem) says it is unable to meet local demand for tar because Chinese firms who have taken over the crude tar mining at Hwange prefer the more lucrative export market.
ZimChem Managing Director Tendai Shoko said Zimbabwe’s financial crisis meant the Chinese miners were more interested in overseas exports which pay in hard currency.
“Currently we’ve two batteries that are operational in the country and they’re owned by Chinese business people in Hwange,” Shoko said, speaking during a Confederation of Zimbabwe Industries (CZI) meeting focusing on consolidating value chains within local industries.
“Now, on the issue of value chain we would be very happy to get all the tar from the Chinese to process it as ZimChem and also support the timber industry and the road construction industry.
“But because of the shortage of foreign currency, the Chinese are here to make money and they need to produce their tar and get the US dollar which they will repatriate back to their country. As a result, they would prefer to sell that commodity to South African markets than to give Zimbabwean manufacturers or processing companies. That’s our dilemma.”
The Redcliff-based company has no alternative as the two batteries in Hwange are the only source of raw materials in the production of tar.
“We can only pay by transferring money into their accounts,” said Shoko, “we’re not able to give them the US dollar so to them it’s not favourable. They would rather export the raw material to South Africa which actually breaks down the essence of value chains in the country.
“So what happens in the end is that road construction companies are importing primary Bitumen and other materials which we can produce locally in Zimbabwe.
“Timber treatment companies, the likes of Border Timbers and Allied Timbers, are importing timber treatment chemicals which we can actually produce locally. So that’s the problem that we have and we really need support in that aspect.”
CZI President Sifelani Jabangwe said the chamber will look into the issue and call for a discussion on the way forward or find ways to coerce the Chinese to cooperate as the country drives for import substitution to save unnecessary foreign currency expenditure.
“We really need Import substitutions to minimise foreign currency going out. We need to find a way for them to be coerced to cooperate or discuss so that we find the best way forward,” Jabangwe told the conference.
“Let’s put the camps together because maybe the foreign currency that the Chinese companies want is just 30 percent of the total amount we are spending on those imports.
“There’s no reason why ZimChem should be struggling when there’s demand for its products and the supply is local. Alternatively, we can see how another battery can be set up so that they can supply you directly.”
ZimChem processes crude tar to manufacture a wide range of chemical products which include road construction products, adhesives, paints and veterinary products, among others.
