- Engages government over scrap copper
Phillimon Mhlanga
Cable manufacturer, CAFCA Holdings Limited, has lurched into a crisis following its failure to secure scrap copper from the local market, the Business Times can report.
Basil Makoni, CAFCA export manager, disclosed the latest development this week saying the company has been forced to import expensive “virgin” copper from the Copper Belt, Zambia.
Makoni also revealed that the company which is listed on the Zimbabwe Stock Exchange, which holds the company’s primary listing, and also has pockets of its shares trading on the Johannesburg and London stock exchanges, has since engaged government over the matter.
“We are spending over $1 million to import copper from the Copperbelt, Zambia because we are not getting scrap copper from Zimbabwe. We want to recycle scrap copper from the local market but can’t find them because whoever has is exporting. What we are doing
now is to go and import virgin copper from the Copperbelt,” Makoni said.
Makoni said the company has set up a meeting with the ministry of Industry and Enterprise Development to discuss the issue. “We have since booked an appointment to discuss the issue with the (outgoing) Minister of Industry and Enterprises Development, Mike Bimha.”
CAFCA in 2013, entered into a barter trade agreement with the Zimbabwe Electricity Transmission Distribution Company. This was renewed in 2015. The deal entailed that CAFCA supply ZETDC with aluminum electricity conductors in exchange for copper scrap.
Under this agreement, ZETDC was barred from procuring electricity conductors from any other company. The barter deal was understood to be contributing more than 30 percent of CAFCA sales. But, last year, Competitions and Tariff Commission launched an
investigation into the barter trade arrangement between CAFCA and ZETDC, which it believed undermined competition.
The companies were alleged to have violated the Competitions Act by engaging in restrictive measures. Established in 1947, CAFCA is part of Africa Cables incorporated in South Africa, which in turn is owned by Reinert Limited.
The company’s two shift operation is producing between 180 and 200 tonnes a month which is enough to meet demand. The company made a strategic decision during the period under review to decommission its furnace that has lasted 32 months against a useful life of 18 months. The furnace is expected to last until mid-2019.
