Home Business ZESA switches off ZimChem over ZISCO steel debt

ZESA switches off ZimChem over ZISCO steel debt

by commuadmin

CommuTalk Reporter

REDCLIFF-based chemical producing company ZIMCHEM refineries are losing around 150 thousand US dollars a month in potential revenue after the national power utility ZESA switched off electricity owing to a legacy debt by its sister company ZISCO steel.

CommuTalk is reliably informed that the power utility through its subsidiary Zimbabwe Electricity Transmission and Distribution Company (ZETDC) switched off ZISCO steel in early October after the defunct steel maker defaulted payment of services rendered with the debt now in excess of 43 million Zimbabwean dollars.

The debt which accrued over the years combines the now-defunct ZISCO steel and Zimcoke as well as Zimchem, making it difficult for the chemical producing company to serve on its own.

The switching off of the steelmaker has directly affected operations at ZimChem refineries since the sister companies share the same power bill with the chemical producing firm now facing viability challenges.

“We have been operating in such a way where our clients would buy raw materials and we process them at a fee. Now we have orders from South Africa where they require 300 thousand tonnes of tar a month. The issue of power has greatly affected us as we have failed to deliver our targets for the month of October as well as the month of November.

We have lost 150 thousand USD every month as we have been failing to meet the demand. The supplier was here two weeks ago to assess our capacity but still found that there was no power and we are having big problems in that area,” said ZIMCHEM –Acting Managing Director, Tendai Shoko.

The chemical producing company is currently relying on the use of a generator to power the plant in a move that has come at a huge cost.

“Well, we are using an average of 300 liters of diesel a day for our operations which are limited because of the lack of power. Remember the fuel we are buying using forex. The fuel we use in five days is equivalent to electricity for 15 days. We were proposing that it was going to be better if we could use the money, we are buying diesel to offset our ZESA bills,” added Shoko.

ZETDC acting Midlands regional manager Engineer Gibson Kasipo says they will only switch on the power for ZISCO steel after the company honors its debt. On ZIMCHEM’s plight Engineer Kasipo says the power utility has given the chemical producing firm an option to have a separate power feeder which will only be done once the necessary payments have been made.

The state-owned entity is now pinning its hope on the government as it seeks to resuscitate its crude tar plant and reopen its benzol plant after the Second Republic placed it under the 8th 100-day cycle projects.

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