Home » General » China Keen to Revive Newsprint Producer

UNNAMED Chinese investors have reportedly shown interest in collapsed newsprint manufacturer, Mutare Board and Paper Mills (MBPM), with an ambitious plan to inject at least US$25 million, the Financial Gazette’s Companies amp Markets can report. The project is being spearheaded by a consortium of timber producers, Timber Producers Federation (TPF) chairman Joseph Kanyekanye disclosed.

“There is an integrated project by various timber producers who engaged some Chinese investors. The investors were keen to pour US$25 million into the project,” said Kanyekanye. He could not reveal the identity of the Chinese investors, nor timber producers involved in the “integrated project”.

MBPM managing director Tich Shonhiwa said there was need to acquire new machinery at the factory as the old plant was out of use. “There is no longer machinery at the factory, what’s left is just scrap metal. Remember the plant was bought in 1952,” said Shonhiwa. MBPM started manufacturing paper board in 1953 before introducing newsprint production in 1962. MBPM, which is a division of ART Corporation, closed its newsprint division in November 2009 due to viability problems, caused largely by undercapitalisation and antiquated machinery.

During its prime, MBPM produced 20 000 tonnes of newsprint, with reserves for the export market. MBPM suffocated from low prices of newsprint that continued to fall against high production costs, putting pressure on margins during the economic meltdown. Its board then re-engineered to focus on timber production after folding its newsprint division, thereby rendering 660 employees jobless.

Consequently, Zimbabwe’s printing and publishing market has been depending on imported newsprint from South Africa since then. The imports reportedly cost the country more than US$15 million a year due to the emergence of new newspapers, which have increased domestic demand for newsprint.

Minister of Environment, Water and Climate, Saviour Kasukuwere, said government was committed to facilitate the resuscitation of the paper industry. “There is a high demand of newsprint in the country. Look at the number of newspapers now in the country. There is Newsday, Fingaz, Daily News… they are all growing in leaps and bounds every year. They all need paper and right now they are importing.

“So the issue here is to say, how we, at ministry level, can facilitate the resuscitation of paper industry in Mutare. Because when you are spending up to US$15 million every year importing paper, it’s worth a while to borrow that money and set the plant locally. We have enough raw materials considering the huge number of timber producers here,” said Kasukuwere.

Source : Financial Gazette