Source: Lancashire Steel deal collapses | The Herald May 3, 2019
A DEAL in which Indian firm, Whinstone Enterprises, was set to pour in funding into Lancashire Steel in a joint venture arrangement, has crumbled after the firm failed to follow laid down Government procedure.
The two parties signed an agreement in July last year, with the Indian investor expected to satisfy the much-needed financial obligation, while Lancashire Steel offered labour, skills and equipment.
But soon after Cabinet had approved the deal, the Indians stood accused of taking shortcuts and disregarding the laid down channel of doing things leading in Government suspending the deal.
Industry and Commerce Minister Mangaliso Ndlovu confirmed that indeed the pact had collapsed unless if the company decides to do things the proper way.
“The Government’s position is that the contract is not legal unless and until the company follows the proper way of doing things. They have to do things properly and until they do so there is no deal as of now,” said Minister Ndlovu.
Although he could not be drawn into discussing the finer details of what went wrong, the minister said the company risks losing the deal totally if they do not put their house in order.
He said Government awaits the company to follow the proper procedure before the deal reaches implementation stage.
“There is no agreement yet so if they are still keen on the deal, Government waits upon them to do things the correct way. Otherwise Government is open for any other suitor depending on the offer. But the doors are still open for the company to follow the procedure,” said Minister Ndlovu.
He, however, assured the nation and Kwekwe residents in particular, not to worry about the collapse of the pact saying Government was more committed to revive industries in the city more than ever before.
“I can assure you that companies, Lancashire in this case, will be back on its feet very soon. Government is more committed than ever before. Recently we facilitated the opening of ZimCoke, which will employ more than 1 000 workers. We are more committed than ever before. Kwekwe is an industrial hub and people there should not lose sleep because as Government we have Kwekwe at heart,” said the minister.
Lancashire Steel folded operations in 2010 after facing operational challenges owing to the demise of Ziscosteel, its major raw material supplier.
The company, which employed about 600 workers at full throttle, can produce about 4 000 tonnes per month.
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