Shepco in US$2 million machinery breakthrough

Oliver Kazunga, Senior Business Reporter
BULAWAYO-based mining and industrial equipment manufacturer, Shepco Industrial Supplies, has acquired another batch of plant machinery under a US$2 million recapitalisation programme.

The company is a division of Shepco Group, an engineering firm that also operates Shepco BMA Fasteners, a bolt manufacturing section that was bought on liquidation in December 2015 from Steelnet.

Shepco Industrial Supplies manufactures mining equipment such as locomotives and underground loaders, among others.

In an interview, Shepco Group chief executive officer, Dr Shepherd Chawira, said the latest equipment was imported a few days ago facilitated by the suspension of duty on capital goods.

In the 2022 National Budget, Finance and Economic Development Minister Professor Mthuli Ncube highlighted that duty on capital equipment remains suspended effective January 1 this year as part of a broader scope by the Government to foster industrialisation.

“We have a consignment of machines, which arrived now that we imported through the suspension of duty on capital goods,” he said.

“We are one of the companies that have embarked on a retooling drive. As I talk right now, we received some machines a few days ago for Shepco Industrial.

“I can’t give you the value off hand . . . but we are looking at US$2 million recapitalisation and we are doing it in phases,” he said.

However, for the retooling project, the group requires US$1 million for Shepco Industrial Supplies and another US$1 million for Shepco BMA Fasteners.

Dr Chawira said the retooling initiative, which started last year, was being done under a phased approach as the manufacturing concern was not able to secure long-term finance.

“We are really looking forward that this recapitalisation programme will bring quite an improvement in terms of the capacity utilisation and also the efficiencies in the production.

“It’s something that we started last year and this year it’s phased out because we can’t secure long-term finance. We have to work with short-term finance and internal financing,” he said.

Asked about the level of capacity utilisation his organisation was operating at, Dr Chawira said: “I will need to come back to you on that number. There was significant change in November and December due to a number of challenges, I think the auction system has seriously slowed down.

“We are getting bids of October/November last year being paid now and that has a very serious impact of delaying the procurement of raw materials and consumables that we need in the manufacturing process.”