MULTINATIONAL oil firm BP & Shell has closed down its blending lubricants plant in the Willowvale industrial area due to sustained foreign currency shortages in the country, businessdigest established this week.
The move has resulted in
over 40 workers being thrown out of work, worsening the unemployment situation in Zimbabwe which analysts say already amounts to a humanitarian disaster.
Corporate affairs manager, Rodrick Kusano, confirmed that the plant had been closed after making losses.
But he downplayed the impact of the move, describing the closure as a rationalisation of “operations at the blending plant” by BP & Shell “in order to remain viable and be ready for any future upturn in the business environment”.
“Blending of lubricants was no longer viable due to market changes and the critical shortage of foreign currency,” Kusano said.
“All the raw materials required to manufacture oils and greases for automotive industrial use are imported and with the critical shortage of foreign currency our plant has not operated optimally for a long time hence the rationalisation (process),” Kusano said.
The closure of the blending plant is likely to add woes to industrial operations that relied on BP & Shell for the supply of lubricants. They will have to scout for supplies from other suppliers in the country who are themselves operating under severe constraints of raising foreign currency from a starved market for imports.
Sources indicated that Triangle Estates, Hwange Colliery Company, Shabanie-Mashaba Mine, and Renco Mine, a RioZim subsidiary gold mine, were some of the key clients for BP & Shell’s lubricants.
Sources revealed that only the Warehouse and the Liquid Petroleum Gas department which imports and distributes gas, have remained operational at the plant.
BP & Shell joins hundreds of other industrial and business operations that have closed shop or rationalised operations over the past six years due to foreign currency shortages and a host of other economic problems affecting the country’s economy.
Zimbabwe is currently facing its worst economic crisis in history, characterised by fuel and power shortages caused mainly by an acute shortage of foreign currency.
Basis food commodities are also in short supply, mainly due to agrarian reforms under which the government expropriated white-owned farmlands for redistribution to landless black peasants.
The reforms have been largely abused by ruling party bigwigs, who have parcelled out fertile land to themselves and their cronies. The land, however, has become derelict, plunging the country, once the region’s bread basket, into a basket case.
Other companies have relocated to more stable economies in Botswana or South Africa.
Kusano said 15 of the initial 58 workers have remained at the plant to coordinate the importation and distribution of finished products.
“Currently the blending operations have been suspended at this plant and we will only be receiving finished products for onward distribution to our customers,” he said.
Businessdigest understands that some workers were retrenched in March and given their packages following authorisation granted by the Minister of Labour and Social Welfare.
Kusano however said the company had made arrangements to minimise disruptions to customers.