The Sunday Mail
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Major projects set for take-off
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Key legislative changes on cards
THE country’s economic turnaround efforts are set for a major fillip as mega projects worth billions of dollars spanning across critical sectors such as energy, manufacturing and mining are expected to take off this year.
The investments are expected to create thousands of jobs, thereby improving the living standards of many citizens.
Top political leadership and Zimbabwe Investment Authority (ZIA) officials have been embarking on programmes tailor-made to lure huge investments into the country and this year, most of the projects are set to be rolled out.
Crucially, Government has accelerated the implementation of signed projects.
Chief Secretary to the President and Cabinet, Dr Misheck Sibanda recently announced that the first 100-day Rapid Results Action Plan that begun on September 11, 2014 had achieved several milestones, including reducing the number of days it takes to register a property from 36 days to 14 while the amount of time it takes to pay taxes was reduced from 242 hours to 160.
The other reforms include amending the Companies Act, Shop Licensing Act and the Procurement Act; and reducing the number of days it takes to register a business from 30 days to between 10 and 15 days.
Dr Sibanda said they had set the first quarter of this year as the target to complete key reforms which will see an improvement in the doing business index.
While work on improving the doing business environment is underway, a number of projects are set to take-off beginning this month.
Some of the investments include the much-hyped Dangote Group investment, Hwange Thermal Power Station expansion, the commissioning of the Pepsi plant, Victoria Falls Airport upgrading, and the Willowton Group’s investment in Mutare.
Dangote Group’s US$1,2bn
projects
Africa’s richest man, Mr Aliko Mr Dangote, whose net worth is estimated at US$17,2 billion by Forbes magazine, has processed paperwork which will see his company — the Dangote Group — setting up a 1,5 million tonne per annum cement grinding plant, a coal mine and a power plant by the first quarter of 2016.
A number of technical teams from the company are already doing groundwork which will see the projects valued at US$1,2 billion kicking-off.
The projects include a cement plant valued at US$500 million, power generation project (US$400 million) and coal mining project (US$300 million).
The power generation project is expected to produce 600 megawatts of electricity to be used at the cement plant with the remainder being fed into the national grid.
Zimbabwe is battling fierce power shortages due to declining water levels in Kariba Dam and a lack of new investment in power projects in recent times.
Power is seen as a key economic enabler and the Dangote Group’s investment will help the country achieve its growth target of 2,7 percent set in the 2016 National Budget.
Hwange Thermal Power Station’s US$1,3bn expansion
Another critical power deal, the expansion of Hwange Thermal Power Station’s unit seven and eight is also expected to take-off in earnest this year.
During Chinese President Xi Jinping’s visit, he brought a huge delegation of Chinese businesspeople who included officials from Sino-hydro, a Chinese company that is undertaking the expansion of Hwange Thermal Power Station.
Sino-hydro Zimbabwe senior administrator, Mr Noel Gonah told our sister paper, The Herald, that all the documentation for the Hwange project is in place and the firm is “already mobilising its resources for the project”.
The topographic survey and geological investigation of the site have already begun.
Similarly, the project design has also started in China.
“Once the fund is secured, we can start construction in mid-2016, and we are very optimistic that the project can be commissioned by 2020,” said Mr Gonah.
Sino-hydro is also expanding Kariba South Power Station and upon completion, both projects with add 900MW to the national grid.
The country has an installed capacity of 2245MW but due to obsolete equipment and other challenges, it is only generating just over 900MW.
Low power generation has impacted negatively on capacity utilisation in the manufacturing sector, which has plunged from 57 percent in 2010 to 34 percent last year.
Falgold Zimbabwe Limited announced in financials for the year to September 30, 2015 which were released last week that it was adversely affected by “unplanned and unsustainable power outages” in early September.
Falgold is mulling closing its operations in Zimbabwe if the challenges persist, hence the centrality of investment in power projects.
Equally important in the Hwange/Kariba expansion projects is the creation of over 2000 jobs and the availability of electricity to domestic users.
At the moment, some domestic users go for over 15 hours a day without electricity.
Willowton Group’s US$40m investment
In the manufacturing sector, there are various projects set for this year, including the US$40 million investment by a South African company, Willowton Group.
The firm is expected to set up an integrated fast consumer goods plant in Mutare.
It produces a range of products such as edible oils, margarines and spreads, toiletries, laundry and bathing soaps, candles, chocolates, waxes, stock-feeds and industrial fats.
Local consumers are familiar with some of Willowton’s products such as Sunfoil and D’lite cooking oil.
Industry and Commerce Minister, Mike Bimha indicated last week that the company is “currently going through the necessary statutory approvals”.
Some of its equipment is being shipped from Germany while it is understood that boilers are being made by a local firm.
The plant is set to produce close to half a million litres of edible oils per day, with D’lite cooking oil being the major product.
Almost 100 jobs will be created directly when the company kicks-off operations while hundreds other jobs will be created downstream.
The group has three plants in Pietermaritzburg, Johannesburg and Cape Town.
Consumers are set to benefit from the coming in of Willowton as competition among oil expressers will intensify.
Currently, there are four main oil expressers in Zimbabwe – ETG Parrogate, Surface Investments, Olivine and United Refineries Limited – with crushing capacity of 24 000 tonnes of oil seed a month.
Zimbabwe is currently being supplied mainly by two processors, SurfaceWilmar which is now the largest after acquiring Olivine, and Pure Oil (producers of ZimGold).
Mid December last year, Minister Bimha said the country is now producing 12,1 million litres per month, which is over two million litres more than the monthly requirements of 10 million litres, due to protectionist policies adopted by Government to revive local industry.
Prices of cooking oil have spectacularly plunged since the successful revival of Bulawayo-based United Refineries Limited, and are hovering between US$2,70c and US$3,30c, depending on the brand.
Localisation of oil production will significantly slash the country’s import bill which was slightly over US$6,3 billion in 2015.
Exports totalled US$3,4 billion, creating a trade deficit of US$2,9 billion.
Pepsi’s US$250m investment
Varun Beverages Limited of India is also expected to invest over US$250 million dollars in Zimbabwe in the next three years.
The investment, which will be channelled towards a potato and tomato puree processing plant as well as a bottling plant for Pepsi beverages will create over 5 000 jobs.
The US$30 million bottling plant is set for Harare and is expected to be operational in the last quarter of the year.
A ground breaking ceremony was done late last year.
The bottling plant will produce in excess of 200 plastic bottles (500ml) and 350ml cans per minute, which will ensure a consistent supply of beverages in the market.
Varun Beverages Africa group chief executive, Mr Krishnan Shankar said the potato and tomato puree processing plant should be operational in 2018.
The Indian company owns a chain of restaurants in India and expectations are that the puree and potatoes for French fries could be exported to those operations.
US$150m Vic Falls Airport commissioning
The commissioning of the Victoria Falls International Airport, which was constructed at a cost of US$150 million, is set for April this year.
Work on the state-of-the-art airport is almost 98 percent complete.
With a car park accommodating 500 cars and a capacity to handle three Boeing 747 planes, 10 Boeing 737s and aerial aviation aircraft at one time, the new airport is in tandem with international standards.
The completion of the Victoria Falls Airport comes at a time when Tourism and Hospitality Industry Minister, E Walter Mzembi has been calling on stakeholders and Government to create a conducive atmosphere for the development of a US$30 billion economy.
Eng Mzembi has indicated willingness to create a “Niagara” next to the Victoria Falls Airport.
“We realise that the difference between our own Victoria Falls and Niagara is that we have not planted any infrastructure that captures the imagination of the demographic dividend, the younger group,” said Dr Mzembi recently.
The airport is expected to boost earnings from tourism to US$30 billion a year to match the Canadian Niagara Falls’s economy.
Eng Mzembi also wants to create an “ultra-modern” Victoria Falls on 300ha adjacent to the airport to boost infrastructure and earnings.
Meanwhile, ground work at Santonga, which is being built on 80ha near Victoria Falls Safari Lodge, begun last year. The education, entertainment and conservation park, which is expected to draw 120 000 visitors a year, is set to open in June 2016.
PPC to commission US$80m plant this year
Pretoria Portland Cement Zimbabwe (PPC Zimbabwe) is set to commission its US$80 million cement plant in Harare.
The new plant, which is expected to be commissioned in the second half of this year, will boost production by 700 000 tonnes.
The local construction industry is booming and PPC Zimbabwe believes the Harare plant will help it increase its revenue and footprint in the country.
PPC Zimbabwe’s investment will help the country transform its infrastructure which is seen by analysts as a key enabler to economic growth.
PPC Zimbabwe already has a cement plant in Bulawayo.
Blanket Mine investment
Caledonia Mining Corporation has a number of investments, including the ‘Tramming Loop’ 750 metres below surface and the No. 6 Winze which will provide access to deeper level resources and sinking a new 6-metre diameter Central Shaft from surface to 1,080 metres for its Blanket Mine.
The Tramming Loop was completed ahead of schedule in June 2015, paving the way for increased production averaging 80 000 ounces per year from this year going forward.
Caledonia chief executive, Mr Steve Curtis says the completion of the Tramming Loop and sinking of the No. 6 Winze early last year were significant steps towards progressively increasing production to achieve an annual rate of 80,000 ounces of gold by 2021.
“The Central Shaft project remains on target. I expect the main sink phase from 90 metres to 1,080 metres to commence in mid-January 2016,” said Mr Curtis.
Metallon’s US$290m investments
The country’s largest gold producer, Metallon Corporation, plans to invest more than US$290 million in capital expenditure over the next four years.
This will see a three-fold increase in output to 550,000 ounces annually.
The low cost gold miner owns How Mine, Shamva, Mazowe, Arcturus mines and Redwing.
Production is expected to increase at Redwing to 111,000oz per annum by 2019 at a capital cost of US$73 million.
About US$69 million will be spent on the company’s flagship – How Mine – which is expected to increase annual output from the 55,000oz achieved in 2014 to 100,000oz in 2019.
Shamva is also set to get US$54 million to upgrade its shaft and expand the sands retreatment plant with Arcturus receiving US$46 million for a shaft upgrade as well as development and exploration.
This year, Zimbabwe targets over 20 tonnes of gold, up from 18 tonnes last year.
