South Africa and China build steel pipe plant in Mozambique

A factory making steel tubes with an investment of around $ 50 mm (R 375 mm) has been opened in the Beluluane free zone outside Maputo. The factory is a joint project between South African, Chinese and Mozambican companies.
According to a report circulated by the Centre for Chinese Studies at Stellenbosch University, the factory is owned by newly formed company Capital Star Steel. It covers about five hectares of land and employs around 200 workers. Since it is located in a free zone, it is exempt from tax for between five and 10 years.

The main shareholders in Capital Star Steel are Seven Star Steel of China and the South African group Africa Star Steel, which each hold 40 %. The remaining 20 % is in the hands of a group of Mozambican companies, including the Mozambique Zimbabwe Pipeline Company, the state-owned fuel distribution company Petromoc, the electricity company EDM, the Matola Gas Company and Petroline.
The latter is involved in the project to build a 570 km-long pipeline linking the oil terminal in the Port of Matola to the South African provinces of Gauteng and Mpumalanga.

Armando Guebuza, President of Mozambique, inaugurating the factory, said: "Factories such as this demonstrate to the world that Mozambique is a safe destination for large-scale private investment, and that we have the human capital and a favourable environment for the installation, operation and prosperity of world-class companies, as well as the capacity to interact with multinational businesses and with them contribute to improving the performance of the national economy."
Garnet Twingg, chairperson of Capital Star Steel, said that the proximity of the port of Maputo was a determining factor.
"We need to be near a good port in order to reach our export markets," he said.

Markets have already been secured in South Africa and the United States, and the project will, in an initial phase, have capacity to produce 200,000 tons of steel pipes per year.