Saddled with operational challenges — owing staff US$19 million and with creditors approaching courts to recover money — the Hwange Colliery Company Limited (HCCL) board has turned to Thomas Makore to provide the turnaround.
BY NDAMU SANDU
Makore said his appointment as HCCL managing director last month gave him the mandate to run the company which is also key to the revival of the Zimbabwean economy.
“I want to contribute to Hwange and the economy. Coming from South Africa, I felt it was time to go back home and contribute,” he said.
Makore is unperturbed by the mounting constraints facing the company saying that with “teamwork and systematic approach —among stakeholders, customers, suppliers and staff — we can collectively find solution to come out of this [financial problem]”.
Workers have gone for 11 months without salaries while some creditors that are owed US$13 million have approached the courts.
The legacy debt of US$50 million has eroded the company’s status as a going concern, becoming the elephant in the living room.
“The only way to find a lasting solution is to increase production, operate efficiently and discipline. We have to work harder. We have to do more so that we come out of these challenges,” Makore said.
“We have very aggressive targets for production for the second half of the year. Within this half, with additional equipment and commencement of production by contractors — all these initiatives are aimed at increasing production, sales and start paying salaries on time.”
HCCL is expecting delivery of loading and drilling equipment worth US$15 million from BEML of India. It will also get additional mining equipment from Belaz of Belarus worth US$18,3 million. All the new equipment is expected to be on site by next month or September at the latest.
The new equipment is set to see HCCL doubling its monthly output to 300 000 tonnes of coal.
Makore said the missing link in HCCL had been working capital constraints and bottlenecks in production. He said the constraints would be addressed under the company’s turnaround plan.
His term at HCCL begins when the company has been dislodged as the largest coal producer by the four-year old Makomo Resources.
“Well done to them (Makomo), they have done very well,” Makore said, adding the recapitalisation initiatives the company was going through would make HCCL “a dominant player in all segments of the coal market”.
The coalminer depends on National Railways of Zimbabwe (NRZ) to move coal to customers. The rail parastatal is struggling to stay afloat but the HCCL boss said discussions have commenced on the capacity of NRZ.
“They are addressing their capacity constraints. They are taking their own initiative to increase capacity. Where we have gaps, we can use road to transport the coal,” he said.
Discussions with the Zimbabwe Power Company in relation to the expansion works at Hwange Power Station were ongoing, Makore said.
The expansion would add two units of 300MW, each resulting in the demand for more coal.
He said HCCL had applied for coal concessions in the Western Area to help address the “needs of our customers such as ZPC and other projects we see on the radar like Essar”.
Demand for coal is currently low due to the low capacity utilisation in the manufacturing sector. Makore believes with capital injection to the manufacturing sector, demand for coal would rise and the company should have the capacity to meet the demand.
Concern has been raised on the use of fossils with a push towards renewable resources like solar, and hydro for electricity.
Makore said there should be co-existence between renewable and non-renewable sources of energy. He said while there was a push to promote clean environmental initiatives, “we have to be honest as Zimbabwe that we have natural resources which produce cheap sources of energy”.
He said HCCL was looking at coal beneficiation to convert it into liquid fuel. That technology is being used by Sasol in South Africa.
Makore said he had the expertise to pull the company from the doldrums. He boasts of 25 years’ experience in manufacturing, engineering and project management.
He began his career at sugar producer Triangle, moving to ABB Zimbabwe, then Zimbabwe Fertiliser Company before joining the great trek to South Africa.
He worked for Siemens for 12 years and was seconded to Germany as part of career development. At Siemens he was head of the energy business (power generation).
Makore joined a telecommunications company, Diebold, as managing director of sub-Saharan Africa.
He left Spescom where he spent seven years. Makore moved to Cummins South Africa where he was commercial director for 18 months. He worked in consultancy business for about a year before a call from the Colliery lured him back to Zimbabwe.
“I have experience to run businesses having led organisations that are multinational. I worked in the turnaround of companies and some of my major areas of interest are customer relation management, operation management and strategy,” Makore said.
“I believe with my skills and qualifications, I am able to contribute to the turnaround of Hwange and be able to raise funding to address the immediate challenges and help the company to grow sustainably,” Makore said.
Makore said having active shareholders was a healthy situation as “they have invested money because they believe in the company and we are counting on them for their support”.
In HCCL, Makore has the tough-talking Nicholas van Hoogstraten, a bundle of energy at every annual general meeting.