DIDG, Aveng in US$3m Fort Concrete deal

THE Diaspora Infrastructure Development Group (DIDG) has signed a term sheet with the Johannesburg Stock Exchange (JSE)-listed Aveng Infraset, which will see the companies injecting in excess of US$3 million into the resuscitation of Gweru-based firm, Fort Concrete.

Overall, the investment will go up to US$10 million as the two companies seek to modernise Fort Concrete.

Fort Concrete is owned by Aveng Infraset and is involved in the making of railway sleepers and other concrete products for the infrastructure industry.

DIDG, together with Transnet of South Africa, won the US$400 million tender to revive the National Railways of Zimbabwe (NRZ).

It will hold 50 percent shareholding in the business once all paperwork is thrashed out.

Fort Concrete scaled down operations at the height of economic challenges in 2008.

Due to the harsh economic environment, which made it difficult for firms to plan for the immediate future, Aveng Infraset management resolved to let workers take charge of operations since then.

Fort Concrete has eight production lines, each producing 148 sleepers. Currently, only two lines are operating. This has seen the workforce being reduced from a peak of 160 to the current 28.

At its peak, the company would produce 800 railway sleepers per day.

But with economic turnaround on the horizon following the declaration by President Emmerson Mnangagwa that ‘Zimbabwe is open for business’, a turnaround of fortunes is expected at Fort Concrete, particularly as DIDG looks to capacitate the entire railway value chain to cut down on imports on critical materials.

The US$3 million investment into Fort Concrete is earmarked for the first phase of the re-commissioning of the plant over the next three months.

DIDG executive chairman, Mr Donovan Chimhandamba confirmed the development to The Sunday Mail Business on Friday at the Fort Concrete premises in Gweru.

“This project is part of our strategy to develop the value chain industries that supply critical materials to NRZ. Fort Concrete will produce rail sleepers that will be used in the NRZ perway rehabilitation programme,” said Mr Chimhandamba.

“With Fort Concrete coming back to life, we are looking to start driving the vital works programme on the track rehabilitation. Also, Fort Concrete will, in the long-term, manufacture other concrete products such as culverts, bridges, pole masts and pipes, which are critical for the infrastructure development programme DIDG has embarked on”.

Aveng Infraset general manager and director for international operations, Mr Kobus Burger also confirmed the deal.

“We want to invest R30 million (about US$3 million) into Fort Concrete. We want to put up a roof on the plant because when it rains we lose production. This factory has been standing for 10 years and the workers looked after it.

“If it had been abandoned, you can imagine what would have happened to it. So we are going to have brand new equipment for this company, a new mixer, getting the factory to its original capacity,” said Mr Burger.

The investment comes at a time when other investors have also committed over US$16 billion worth of projects approved in the first half of the year following an improved doing business environment.

Others are waiting to see the outcome of the court case in which the MDC Alliance is challenging the results of the Presidential election which was won by President Mnangagwa.

It is understood that decent jobs will be created in the near future once the court case has been resolved and investors pour in their funds into the various sectors of the economy.

“Look, we are here for the long-term and Zimbabwe will always be there and we remain resolute on our agenda to recapitalise Zimbabwe’s critical infrastructure,” said Mr Chimhandamba.

3,745 total views, no views today