Coal is cheaper and considered vital for the company’s turnaround. The use of coal, known as gasification, was suggested to the company by Industry Minister Welshman Ncube last year.
Sable Chemicals is currently saddled with more than $30 million of debt, which has accumulated since 2009. Zimbabwe Electricity Supply Authority is owed the biggest chunk. In a bid to improve efficiency, the company initially embarked on an internal job evaluation exercise and reassigned staff from non-critical positions, such as secretaries, into the factory.
Management also cut down on benefits including education allowances for all employees,but that has not helped. The company has about 400 employees. Jack Murehwa, the Sable Chemicals Chief Executive Officer, said the company had sent some samples of the gasification method to China for testing.
“Once the results are out, which they should be in the near future, we will immediately implement the use of coal and abandon the electrolysis method which requires expensive electricity,” he said.
ZESA is at present charging industry 15 cents per kilowatt but the sector maintains that for the firms to be viable, they need to pay three cents.
“The move from electrolysis to gasification is expected to end the company’s woes because we would need less capital to operate,” Industry and Commerce Minister Welshman Ncube told The Zimbabwean.
Gasification means that Sables would stop depending on ZESA’s power. Ncube added that a whole plan to turn around the company was being implemented.
Post published in: Business