Industry

What is industry?

 Industry refers to the production of goods and services in a country

 It is the capacity or ability to do work where some form of energy has to be used in the process.
 It can also be viewed as any economic activity legally conducted and beneficial to people.
Types of industry

Primary industries

 These produce or extract raw materials from nature (earth) to be used by other economic sectors.
 Examples include fishing, farming, forestry and mining hunting and gathering and quarrying
 Primary industries involve the production of raw material and basic foods
 Developing countries have traditionally been suppliers of raw materials to advanced countries.
 This is one of the reasons that they were colonized.
 As a result, they have many well-established primary extractive industries.
 There are also other reasons why extractive industries have grown in these developing
countries such as Zimbabwe.
o Among them is the availability of the raw materials,
o the cheapness of extraction,
o the availability of cheap labour required
o the need to create employment for the rapidly expanding population
o lack of technology to develop processing plants

 thus in developed countries a small proportion of workers are involved in the primary sector,
while in LEDCs most workers (two-thirds of the labour force) are in primary sector

Secondary industries

 These are also known as processing and manufacturing industries.

 In these industries, the production processes are undertaken in a unit called the factory.
 It is important to distinguish between processing and manufacturing.
 Processing involves the initial removal of impurities from raw materials(eg by beneficiation
industries) while manufacturing is a step further to make or produce end-products (eg car
assembly)
 All of manufacturing, processing, and construction lies within the secondary sector.
 Examples include metal working and smelting, automobile production, textile production,
chemical and engineering industries, aerospace manufacturing, energy utilities, engineering,
breweries and bottlers, construction, and shipbuilding

Tertiary industries

 Tertiary or service industries

 This sector provides services to the general population and to businesses.
 These industries provide back-up services to primary and secondary industries so that their
functioning becomes easier.
 Examples include administration, retailing, power supplies, health, education, housing.
wholesale, transportation and distribution, entertainment (movies, television, radio, music, and
theatre), restaurants, clerical services, media, tourism, insurance, banking, healthcare,
communication and law
 In most developed countries, a growing proportion of workers are devoted to the tertiary sector.
In the U.S., more than 80% of the labour force are tertiary workers

Quaternary industry
 The quaternary sector of the economy consists of high technology and intellectual (research)
activities.
 It is knowledge based part of the economy
 Activities associated with this sector include government, culture, libraries, scientific research,
consultation, financial planning and information technology
 Examples of companies in this sector in Zimbabwe include The Scientific and Industrial Research
and Development Centre SIRDC
 Processing done here involves micro-electronics such as those of Microsoft industries but
included here is manufacture of precision medical tools, biotechnology and pharmaceuticals.
 Information, office work expertise and research and development constitute major inputs into
these industries.
 In advanced countries, much of the labour force is employed in these industries

Heavy and light industries

Secondary industry may be divided into heavy, or large-scale, and light, or small-scale, industry

 Industries can also be classified as heavy and light industries depending on the bulk and
weight of the raw materials being used.
 The weight and size of the end products is also considered in this classification.
Heavy industries

 These include the metallurgical industries such as iron and steel at ZISCO, Redcliff, basic metals
at ZIMALLOYS, Gweru, ZIMCAST, Gweru Lancashire steel, Kwekwe, ZIMASCO in Kwekwe.
 Others are mechanical industries such as heavy engineering, electrical industries such as heavy
engineering, electrical goods, railway stock, shipbuilding and car assembly.
 They are dirty due to the nature of the job.

 They are also referred to as engineering firms

 Are dirty due to nature of their job
 Big plants covering large areas of land.
 Capital intensive, big investment needed to set them up.
 Make large products often bought by other manufacturing companies.
 Examples: steel, oil-refining, chemicals, engineering and ship building
Light industries
 Make small products or limited quantities of goods, mainly to be bought by individuals.
 Only a limited amount of investment capital is needed.
 Examples: electrical goods, clothing, food-processing and toys.
 Are located in both rural and urban areas
 Use small quantities of raw materials
 Usually cause less smoke pollution
 Use very low levels of technology
 Land demands are low
 Examples are foodstuffs, drinks, textiles, footwear and tobacco.
 These can be referred to as footloose industries because they can locate anywhere.

Large-scale and small-scale industries

 Another traditional classification of industries is on the basis of large scale and small-scale
industries.
 Large-scale industries occupy a lot of space as compared to small-scale industries.
 An example is a car assembly industry which requires a lot of space for building the assembly
industry lines, offices, for storage of kits and other spares, for test driving vehicles from the
assembly lines and for paring finished vehicles awaiting delivery to markets.
 On the other hand, an industry like a bakery uses very little space and is therefore, a small-scale
industry.
Formal and informal

 Industries can also be categorized as formal or informal.

 Formal industries are those operating in factories in well defined industrial zones.
 However, even some informal industries may be undertaken in similar environments though
the majority are the so-called backyard industries cropping up in residential areas in the
urban settlements of Zimbabwe or carried out in the open.
 Examples include backyard car repair and pray painting, wire making, door and window
frame manufacture, shoe repair, furniture, making, carving and crotchetry industries among
others.
 There are no hard and fast rules of classifying industries.
 Everything depends on one’s aims and objectives in undertaking the exercise.

Formal and informal industry

 The formal sector consists of the businesses, enterprises and economic activities that are
monitored, protected and taxed by the government, whereas the informal sector is comprised of
the workers and enterprises that are not under government regulation
•Most people in MEDCs have formal jobs

Advantages of formal industry

•Employees have regular hours,
•Workers have a stable weekly/ monthly set wage,
•The industries pay taxes to government hence contribute to national development
•Workers have reasonable working conditions.

In LEDCs, while many people have Informal jobs.

•These jobs do not involve the payment of taxes,
•are often unskilled and labour intensive,
•require little money to set up and
•offer no protection to the worker if they are sick or fall upon hard times.
•Examples of informal jobs include shoe shining, fruits and vegetable vendors and small backyard
businesses, all rob governments of valuable tax money but provide an income for people with next to
nothing.

All industries can be thought of as a system of inputs, processes, outputs and feedback.
Industry as a system
System diagram for industrial activity
1. Inputs are the things that go into the system. The main three inputs are:
Physical inputs. These include sun, soil and water in primary industries and raw materials
such as cotton, metal or oil in secondary industries.
Labour - either skilled or unskilled.
Capital. This is the money invested in the business to pay for raw materials, staff,
machinery and the buildings used for production and storage.
2. Processes are all the things that happen to those inputs to help turn them into outputs. These
include:
Production - for example the manufacturing of cars, or the sewing of textiles.
Factory maintenance, which is necessary to keep machines in working order.
Packaging which protects products during transit and presents them in a way that
makes customers want to buy them.
Transport, which is needed to move products from the factory to the warehouse and
then on to the shops.
3. Outputs are the finished products, together with profits and wages.
4. Feedback includes anything that refines or improves the system, such as:
Customer feedback. Companies find out what consumers think of their products
through market research. They may alter or adapt their range according to feedback to
sell more products and maximise profits.

Industrial location factors

Power supply
Communications - including transport, telecommunications.
Labour supply - including workers with the right skills.
Access to market - where the goods are sold.
Grants and financial incentives - usually from governments.
Raw materials
 Factors affecting the location of manufacturing industries

Physical factors
Raw materials
 The factory needs to be close to these if they are heavy and bulky to transport so that it can
minimise costs of production.
 Therefore, most of the agro-based and forest-based industries are located in the vicinity of the
sources of raw material supply.
 Nearness to the sources of raw materials would reduce the cost of production of the industry and
so is key to industrial development.
 ZISCO for example located et Redcliff close to source of iron ore because the ore is bulk and
heavy to transport
 Ubiquitous- Water, Air, Soil……
 Localized-Iron ore, coal, gold, tin

Energy supply
 This is needed to work the machines in a factory.
 Early industries were near to coalfields. For example in Germany early industrial growth
occurred in the Rhur region that had plenty coal
 Today, electricity allows more freedom such that industries can locate any where and power will
be connected by cables at lower cost than in the past
 Frequent power outages in Zimbabwe are said to be a major factor discouraging industrial
location in the country

Site and land

 Most industries require large accessible areas of cheap, flat land on which to build their factories
Climate
 Climate also plays a part in the location of industries. The stimulating cool temperate climate is
more suitable for the development of industries because this type of climate adds to the work
efficiency of the labour force.
 This is one of the major reasons why temperate latitudes have well-developed manufacturing
industries rather than the tropics or the desert or the Tundra regions.
 Climate plays a significant role in location of cotton textile manufacturing industries for example
the climate for Gokwe, Sanyati and Kadoma is favourable for cotton production which then
attracted ginning and textile companies.
 On the other hand the eccessively hot and wet equatorial climate discourages industrial location
there

Human and economic factors

Labour

 A large cheap labour force is required for labour-intensive manufacturing industries.

 High-tech industries have to locate where suitable skilled workers are available

 The attraction of an industry towards labour centres depends on the ratio of labour cost to the
total cost of production which Weber calls ‘Labour cost of Index

 Many industries in Zimbabwe are found in Harare where there is plenty skilled and sei-skilled
labour

Transport

 A good transport network helps reduce costs and make the movement of materials easier
 water, road, and rail transport, collectively plays an important role hence the junction points of
water-ways, roadways and railways become humming centres of industrial activity
 good transport network is required if an area is to attract industries because that is required for
easy movement of finished goods, labour and raw materials
 that’s an area can have plenty raw materials but lacking good roads and rail and so cannot attract
industries eg Mutora Growth point has plenty cotton but is failing to attract industries due to bad
roads

Market
 An accessible place to sell the products is essential for many industries:
 those that produce bulky, heavy goods that are expensive to transport
 those that produce perishable (goods that quickly go bad like bread) or fragile goods (that break
when being transported) needs to locate close to market to be able to sale their goods while still
fresh
 those that provide services to people also need to be close to people
 Have to locate near the markets to be able to reduce the costs of transport in distributing the
finished product as in the case of bread and bakery, ice, tins, cans manufacturing, etc.
 Accessibility of markets is more important in the case of industries manufacturing consumer
goods.
 However, the market is not so important for other industries such as high-tech whose products
are light in weight and cheap to transport. Such industries are said to be 'footloose
 Also a market oriented location is no longer very important due to technological advancement
that have introduced refrigeration

Cost of land
Greenfield sites in rural areas are usually cheaper than brownfield sites in the city.

Capital
 This is the money that is invested to start the business. The amount of capital will determine the
size and location of the factory
 A place with easier access to capital like loans usually attracts more industries than one without
Break of Bulk
Industries that deal with products that loose much weight on processing need a location close to
source of raw materials eg oil manufacturing companies
Agglomeration economies

Agglomeration
 The clustering of several similar or related industries at the same location leading to geographic
concentration.
 For example, the heavy industry is concentrated along Bristol road in Gweru, while the light
industry is concentrated on the northern end of CBDs.
 Firms in the same industry often have lower production cost when the located near their
competitors as they inter-depend on each other.
 Agglomeration leads to External economies of scale which are
o Inter-plant transport saving
o access to common pool of skilled labour
o presence of special training institutions
o presence of ancillary services
o research and development of collective facilities
o sharing cost of certain operation
 agglomeration also leads to internal economies of scale (advantages)
 The term economies of agglomeration describes the benefits that firms obtain when locating near
each other. The more related firms are clustered together, the lower the cost of production
because
 firms have competing multiple suppliers,
 greater specialization and
 Development of specialist labor result
 Greater market that the firm can sell into.
 Industrial linkages between firms where goods flow between plants
 availability of skilled manpower
 common infrastructure of roads/ ports
 concentration of market demand

Greater possibility of specialization

o mass production
o bulk purchasing
o special transport rates
o more efficient use of machines and labour
o lower production cost
Advantages of industrial agglomeration
 Enjoy an already well-developed infra-structure
 enjoy a common pool of skilled labour and expertise
 enjoy cheaper supplies of material inputs and ancillary services
disadvantages of industrial agglomeration
 Agglomeration may also lead to traffic congestion, pollution and other negative externalities
caused by the clustering of a population of firms and people and that this may lead to
diseconomies of scale.
 Higher crowding and increased waiting time—can be observed in disciplines or industries
that are characterized by constrained access to relevant production facilities or resources.
 because of the many competitors in the area ,a shortage of labour may be experienced
leading to labour becoming expensive
 Lack of flexibility among firms moves their labourers around.
Political factors
Government policies
 Industrial development is encourages in some areas and restricted in others. Industries that
locate in depressed ('Development') areas such as Growth Points (eg Gokwe Centre) in
Zimbabwe may receive financial incentives from the government in the form of low rent and
rates
Explain fully how government policies can influence location and growth of industries
Governments can greatly influence the location of industries by giving incentives, cheap rent and
other benefits to companies that want to locate at Growth points in Zimbabwe
 Fiscal police ie
 system of taxes
 Availability and control of forex
 Control of use and banking of profit by foreign companies
 Domestic policy Is it capitalism/ socialism
 Industrial location policy -Promoting growth point location

Government Policy and Location of industries

 This factor affects both industrial growth and location in a national economy in a number of
ways.
 In terms of industrial growth, government can affect this through:
 Fiscal policy – Fiscal policy is the means by which a government adjusts its spending levels
and tax rates to monitor and influence a nation’s economy. Under these policies industrialists
will seek answers to questions like, what is the nature of the tax regime prevailing in a
country? Does the Government allow repatriation of profits by foreign companies? Is foreign
currency readily available or are there stringent controls over is flow?
  Domestic and foreign policy – if government promotes free enterprise and privatization,
industrialists feel happy and will expand their operations.
 On the other hand, where government nationalizes private businesses or control prices or
deliberately encourages trade unionization and fixes minimum wages, entrepreneurs are
threatened and move to greener pastures.
 It is the responsibility of government to supply basic infrastructure to industries in the form
of transport, power, health and education so that industrialists simply tap these services.

As for industrial location, government can influence this in the following ways:

 Direct ownership of industrial firms – under such circumstances, government will decide
where to locate its factories.
 Industrial location policy – in advanced countries such as France, Italy and UK there occur
what are called depressed regions.
 Under such conditions, government deliberately promotes industrial location in the
depressed regions through offering multiple incentives while through local authorities, it
makes location in prosperous regions very difficult.
 In Zimbabwe, areas of prosperity are the larger established urban centres such as Harare and
Bulawayo.
 Industrialists want to continue locating here but the government, worried by the disparities
in levels of total national economic development, is in favour of decentralization to smaller
towns and growth points which are looked upon as depressed regions.
 In this regard, government is trying to decentralize by offering incentives such as free or
cheap land, a low tax regime, cheap water and electricity supplies, among others.
 The aim is to have equal economic growth, raising living standards in rural areas, especially
communal lands, stem rural-urban migration by bringing jobs to the people and provide
basic modern infrastructure.
 Growth points such as Gokwe and Mupandawana have sprung up as a result.
 Strategic industries – government decides on what it terms strategic industries. These are
industries of national importance such as ZISCO which it feels should be determined where
to locate by the state.

In this case government directly decides the location of the industry for security reasons and other
considerations.

Types of industrial location/ factors influencing location of industries

Power supply ( power oriented industries)

 Almost all modern industries use electricity in their industrial process.

 This power can come from individual small stations of thermal, nuclear or hydro-origin in
which case the industries must locate close to the sources of power.
 Modern trends have shown consolidation of power and supply through regional and national
grid systems.
 In this case, it is efficiency and reliability of power supply which plays an important role in
overall national industrial growth as well as costs, because industrialists lose business where
 power cuts are very regular or costs are high and they have to cushion themselves with
provision of private generators.
 Industrialists shun to locate in developing countries for this reason where this utility is poorly
run.
 Some industries consume so much power that they have to locate close to large supplies of it.
 Examples include the Valco aluminium smelters at Tema in Ghana near the Akosombo power
plant
 the Kitimat and Arvida projects in Canada or
 the pulp and paper mill on the southern edge of the Laurentian Shield in Canada

Footloose
 Footloose industries are those that are less dependent on factors that tie them to a
specific geographical location
 Unlike manufacturing industries, tertiary or services, companies do not have to be
near a source of raw materials.
 As long as they have suitable transport, energy and communications links, they can
locate themselves virtually anywhere in the world.
 Examples of footloose industries are computer software development, telephone
sales and call centres

Raw Materials and Location of industries 

 From this calculation, a number of situations may arise:

 Industrialists calculate what is called the raw material index (RM index) to determine how
raw materials will affect the location of their industries.
 Main factors influencing industrial location will vary from industry to industry and from area
to area as well as from country to country.
 One of the factors that has to be considered is raw materials
 If the RM index is greater than 1:
 the industry will be raw material based in its location because the weight of the raw materials
is greater than the weight of the finished product.
 Such raw materials lose weight upon manufacture and so to cut down on transport costs of
waste, the industry should locate at the raw material source.
 For example, 7 tonnes of sugar cane produce about 1 tonne of sugar.
 Hence it can be seen that sugar mills are located on sugar plantations such as the Hippo
Valley mills.
 Sugar can also lose weight upon processing.
 Sugar cane is a perishable in that it loses its juice by evaporation and cracks and develops
fungi if exposed to bad weather elements, going bad if not processed immediately after
cutting.
 A second situation may arise where the RM index is less than 1:
 in which case the weight of the raw materials is less than that of the finished product.
 For example, 1 tonne of maize, malt and hops combined make 8 tonnes of clear beer.
  Industries like these become market oriented in location because it is cheaper to assemble raw
materials at the market than to transport the finished products to distant markets.
 Breweries and soft drinks factories are right within markets.
 Situation number 3 is one where the RM index is equal to 1 :
 That is where the weight of the raw materials is equal to that of the finished product.
 Such industries will locate either at the raw material source or at the market or somewhere
between the two.

Market and Location of industries

 Some industries are market-based not because their products are heavier than the raw
materials making them, but because they are perishable.
 Examples are opaque beer and milk.
 Some of them locate close to the market because they gain value upon manufacture for
example, furniture which is more valuable and fragile compared to planks.
 Others locate at the market simply because they need the huge buying power of urban
markets, for example, printing, TV, car and radio assembly, garment making or shoe making
factories.

 Yet others locate close to the market, usually a town or a city because of the existence of
skilled labour, for example watch making and garment manufacture

Break of bulk location

 Break of bulk industries; these are located at ports where raw materials will be off
loaded from ships
 Instead of transporting the bulk raw materials inland the industry choose to locate at
the port and manufacture products there and transport finished goods
 Examples are integrated British iron and steel, ship building and car assembly
Labour based locations (labour oriented industry)
 Are located in areas with plenty labour because they are labour intensive for example
cone textiles in Chitungwiza
 Some require highly skilled labour such as Cango which had to locate in Bulawayo
to make use of skilled labour there

Weber’s locational triangles

 finding the least transport cost location and adjusting this location to consider labour costs
and agglomeration economies.
 Transportation is the most important element of the model since other factors are considered
to only have an adjustment effect.
 To solve this problem, Weber uses the location triangle within which the optimal is located
 To solve this problem, Weber uses the location triangle within which the optimal is located

Optimum locational theory/ model

 A model of industrial location proposed by A. Weber (1909, trans. 1929),

 assumes that industrialists choose a least-cost location for the development of new industry.
 The theory is based on the assumptions that:
 markets are fixed at certain specific points,
 transport costs are proportional to the weight of the goods and the distance covered by a raw
material or a finished product,
  raw materials and markets would exert a ‘pull’ on the location of an industry through
transport costs.
 Industries with a high material index would be pulled towards the raw material.
 Industries with a low material index would be pulled towards the market.
 Industrial location may be swayed by agglomeration economies. The savings which would be
made if, several firms were to locate together

that perfect competition exists, and that decisions are made by economic man

 The above diagram illustrates the issue of minimizing transport costs.

 Considering a product of w(M) tons to be sold at market M.
 w(S1) and w(S2) tons of raw materials coming respectively from S1 and S2 are necessary.
 The problem resides in finding an optimal factory location P located at the respective
distances of d(M), d(S1) and d(S2).
 Several methodologies can be used to solve this problem such as drawing an analogy to a
system of weights and pulleys.
 To assess this issue, Weber developed a material index (MI)
 which is simply the weight of the inputs divided by the weight of the final product (output).
 MI=weight of raw materials ∕weight of finished products

 If the material index is

 higher than 1, location tends to be toward material sources. Eg sugar mills
 If it is less than 1, location tends to be toward the market eg brewaries
 If MI=1 either locate at raw material source, market or in between
 Activities having a high level of use of raw materials tend to locate near supply sources (raw
material oriented )
  Aluminium factories have greater need of energy so tend to locate near power sources
(power oriented).
 Activities using ubiquitous raw materials, such as water, tend to locate anywhere (foot loose).
 Industries that produce perishables or goods that gain weight on manufacture need close
location with people (market oriented

Industrial Linkages

Refers to the interrelationship among various industrial activities through the input-output relationships or
the economic value chain

forward

backward linkages

Vertical linkages

Horizontal linkages

A case study of ZISCO

 This kind of industry is raw material based.

Raw materials required

 Iron ore (Fe) is used to make pig iron or steel; scrap metal may be used in its place.
 Limestone (CaCO3) is used to act as a flux, mixing with and removing impurities and forming
slag in the process.
 Coke from coal is used to provide the heat to smelt the iron ore and the limestone.

Production processes

 The raw materials stated above are poured at the top of the blast furnace using skips.
 Hot air is introduced at the base of the blast furnace and fires up the furnace
 At very high temperatures (1 500° C), the iron ore and the limestone smelt.
 Molten pig iron being heavier settles at the bottom of the blast furnace and slag settles on top
of it as it is lighter.
 These are drawn out of the furnace through different holes.
 The slag will later be used to make fertilizer or can be used in the manufacture of bricks.
 The pig iron can directly be cast into ingots or into tools such as those at ZIMCAST in Gweru
where it is used to make products such as three legged pots, charcoal irons, sewage and
drains lids and wheels of steel ploughs.
 More importantly, the pig iron can be converted into steel.
 Here the pig iron is mixed with pure carbon or with manganese or with vanadium or
chromium or nickel in a furnace, depending on the degree of technological advancement of
the country or company involved:
1. The open heath method
2. The Bessemer convertor method
 3. The electric arc method and
4. The oxyacetylene method
 The resultant steel can then be modulated into blooms or rolled into thin sheets, ready for
sale.
 A lot of water (input) is required to cool the pig iron, the steel, the blast furnaces and steel
mills.
 In the past, blast furnaces and steel mills were located at different site.
 However, modern trends have shown that it is more economical to have the two at one site.
 This is termed an integrated iron and steel works such as ZISCO in Zimbabwe.

Zimbabwe iron and steel company (ZISCO)

 The steel works known as Zimbabwe Iron and Steel Company (ZISCO) (then known as
RISCO, the Rhodesia Iron and Steel Company) started in 1938.
 It was located in Bulawayo as a subsidiary of the South African company called Stewarts and
Lloyd.
 They produced their first 3 tonnes of steel the same year but shifted location a decade later in
1948 to the present site at Redcliff after the discovery of low-grade iron ore called limonite in
the area at Ripple Creek.
 Other raw materials such as manganese and limestone at the Dan and Mel mines were also
discovered in the area, meaning that only coking coal from Hwange and high grade
haemotite from Mt. Buchwa had to be hauled long distances to Redcliff.
 The present site therefore became the least transport cost location point within the
Zimbabwean space economy to assemble required raw materials and market the products
throughout the country.
 The company was and still remains a strategic industry in the country heavily dependent on
government subsidies for its survival.
 In fact, government until recently has been the major shareholder in the company, declaring it
as a parastatal as it is the only steel works in the country.

Advantages of the present location of ZISCO

 The steel work is centrally located in the country to distribute products easily.
 An efficient rail and road network passing through the area making the steel works very
accessible.
 The lowering of assembly costs for raw materials and marketing costs for finished products.
 The presence of a large pool of labour with industrial metallurgical skills shared with other
heavy metal industries in the central Midlands Province such ZIMASCO, Lancashire Steel,
Tor Structures, Industrial Pipe and Fittings. The Zimbabwe Wire and Rope Company all in
Kwekwe and ZIM ALLOYS and ZIMCAST in Gweru.
 Availability of large expanses of flat and uninhabited land.

 Presence of large water supplies from Cactus Poort Dam on the Kwekwe River

Advantages of iron and steel industries

 Many advantages accrue to a country as a result of establishing its own iron and steel works.
Industrial growth

 Iron and steel works are themselves industries, so establishing more of these means industrial
growth.
 The amount of steel produced has been used as a measure of a country’s level of industrial
development with the big ones such as the USA, the UK, France, Germany, Japan and Russia
leading the pack.
 Iron and steel are the basis of most industries such as car assembly, agricultural equipment,
household utensils and goods, the construction, transport and electrical industries.
 This creation of spin-off ancillary industries is called the multiplier effect.
 For example, if there was no ZISCO in Zimbabwe, we would not be having industries such as
Lancashire steel (a direct subsidiary of ZISCO getting steel blooms and wire from the parent
company), Tor Structures, Industrial pipe and fittings, Zimbabwe Wire and Rope Company
(ZWR), Salwire and ZIMCAST.
 This makes goods readily available locally.

Employment creation

 Iron and steelworks employ many people directly on site.

 These work as fitter and turners, boiler makers, metallurgists, sinters, managers and plant
operators as well as machine tool conditioners.
 Others are employed as cleaners and drivers.
 If employment includes those working in coal, iron ore and limestone mines all the way to
those in related industries stated above, then the number is large indeed.

Foreign currency earnings

 A country producing excess iron and steel will sell these on foreign markets, earning foreign
currency in the process.

Urban growth

 Where huge integrated iron and steel work have been established, towns also grow.
 Redcliff in Zimbabwe grew as a result of building the ZISCO works there.

Social services

 With urban growth, social services are supplied to the labour force and residents of the area.
 These include, for ZISCO, residential suburbs like Rutendo, Torwood and Redcliff, schools,
hospitals and clinics in the area, pubs, beer halls, hotels and ZISCO country club as well as
golf courses, soccer for teams like ZISCOSTEEL, all meant to make life bearable to the people
settled there.

Raising living standards of local people

  As people are employed and earn wages and salaries and live in houses of bricks and mortar,
and their houses are electrified, with tap water and flush toilets, their living standards are
raised.

Improvement in transport

 The assembling of distant and local raw materials for steel works requires the establishment
of efficient means of transport.
 Likewise the distribution of iron and steel products to market needs similar transport.

 In the end such transport routes and modes available will not just be utilized by the iron and
steel works only but also by other sectors of the economy and by the people themselves
Problems faced by ZISCO

 Old machinery – ZISCO has 4 blast furnaces of which only Blast Furnace No. 3 has been
operating at near capacity/ Old and out dated machinery
 The others due to age have been shut down.
 The government undertook a refurbishment exercise code named “Operation Zambuko” to
have spun over 5 years and costing about Z$10 billion but to date only Blast Furnace No. 4
has been modified and commissioned at a total cost of 2.5 billion.
 Another problem has been that of old rail wagons which now cannot sustain an efficient
merry-go-round system of transport.

 Shortage of money – the old machinery and production processes require a lot of money to
modernize them/ Lack of capital
 This money is not available.
 Government, realizing the strategic nature of the steel works has been constantly funding it in
an effort to keep the company afloat.
 Poor management – related to the problem above has been the problem of corruption, fraud
and mismanagement of the funds disbursed to ZISCO.
 Markets/ Lack of viable market – local markets are too small to absorb products of ZISCO or
are too poor to do so.
 Competition – on the other hand, Zimbabwe’s iron and steel are not competitive on the
international market as they are either too costly to buyers or are poorer quality as they have
too much carbon and Sulphur content.

 Also scrap metal is replacing pure iron and steel on international markets

 Poor quality of steel as compared with steel from developed countries

Assembly Industries

Are industries which bring together parts from other industries to make a finished product

Examples

 Car assembly

 TV assembly
  Bicycle assembly

Willowvale Mazda Industry

 Willowvale Mazda Industry is part of the assembly industries

Assembly Industries

 These are industries which bring together parts from different other industries to make a new
product.
 Examples include car assembly, bicycle manufacture, radio and TV making and the
production of clocks and watches among others.
 The location of such industries depends on where the parts to be assembled are coming from
but generally small-scale assembly industries locate at markets where demand is high and
where there is a large pool of skilled labour.
 For larger ones like car assembly, markets may be overridden by the land and transport
factors in determining their location.
 In Zimbabwe, small-scale assembly industries like WRS radios and Philips TV are located in
Bulawayo.

The car assembly industry

 The car assembly industry is unique in that it demonstrates internationalization and

globalization of economic needs and necessity.
 To manufacture cars, many different parts have first to be made in other industries all coming
from different raw materials.
 These parts are then brought together at one site where they are put together (assembled) to
produce a motor car.
 There are too many car assembly plants and models of vehicles manufactured in the world.
 This is centrally located in Harare’s Southerton industrial area, this industry has typical
characteristics and problems faced by industries in third world countries.

The site was chosen because of the following locational advantages:

 Large land for building the assembly lines and parking vehicles from these lines.
 Large labour force from surrounding suburbs.
 Large market in Harare.
 Excellent rail and road transport to bring in kits and distribute vehicles to the market in all
parts of the country.
 Availability of power from the national grid.
 Availability of many engineering firms making some of the required components.

In terms of characteristics, the industry has joint ownership between the government through the
Industrial Development Corporation (IDC) and the Japanese Mazda parent company.

o It is facing problems typical of many developing countries such as:

1. Poor local markets.
 2. Low levels of production.
3. Lack of foreign currency to buy spares for back up services.
4. Lack of spares themselves.
5. Stiff competition from established firms elsewhere.
6. Low import duties and tariffs
7. Lack of local vehicle finance schemes
8. Chaotic fiscal policy
9. Lack of skilled labour
10. Decreased/Depressed demand for new motor vehicles forcing capacity to fall
below viable level
11. The widespread usage of the internet allowing people to import their own
vehicles with ease
12. Government defaulting on its purchases

Car assembling in Japan

 Japan has one of the largest and most prominent car industries in the world
 The country has been in the top 3 car manufacturing countries by number of cars made since
the 1960s
 In 2015 the country made just over 9.2 million cars
 It is only surpassed by the United States and China.
 This has been achieved despite a lack of basic raw materials at home.
 Japan has very limited energy, it has to import virtually all its coal, oil and natural gas
requirements.
 This shortage has been made more acute as the country has decided to move away from
Nuclear energy after the Fukushima disaster
 Most of the iron ore and coking coal needed to manufacture steel is also imported.
 The result has been the location of major steel works on tidal sites at the country’s deep and
sheltered harbours.
 These sites are import and export oriented as well as being locations for car assembly
industries (break-of-bulk locations).
 Japan’s major urban centres, linked by modern communications, provide both the workforce
and the large, affluent local markets needed for such steel-based products as cars.
 Within these conurbations (cities which have merged with each other as they grow),
especially Keihin, Chukyo and Stetouchi, are found numerous firms making car component
parts and the vehicles assembled here are easily exported to all parts of the world from these
excellent sites.
 At some of these cities, assembly plants have been built on land reclaimed from the sea as
land is another very scarce resource in Japan.
 The county’s motor vehicles brands such as: Mazda, Toyota, Mitsubishi, Isuzu, Honda and
Nisssan a world wide household names
 Japan has been a contender in the world in motor car production for the following reasons:
1. Very stable socio-political system since 1945.
2. The hard working nature of the Japanese workforce.
3. Very high technology used in assembly lines as all are now robbotised.
4. Availability of capital.
 5. The export drive nature of Japanese industry-no country on earth today does not
drive a Japanese vehicle.
6. Privatization of industry ensuring maximization of returns.

Industrial Relocation

 This is a situation where an industry which had been established in one area has to shift and
locate in a new different area.
 This may even involve trans-border location.
 The industry has to stop functioning and close down all operations in its original location and
move elsewhere.
 Causes of relocation are numerous but the main ones include:
1. Government policy.
2. Environmental pressures on pollution in old established industrial areas.
3. Local authority by-laws.
4. Exhaustion of raw materials at original location and their discovery elsewhere and
use of imported raw materials.
5. Changes in market demand the market may stop buying a particular product due to
a new competitive one causing loses for the industry
6. Changes in production technology. New technology like refrigeration may encourage
some market based industries to relocate to areas with cheap land costs
 The UK iron and steel industry has changed location from in-land, small-scale, unintegrated
coal or iron-ore field based locations of the 1880s to present day coastal, modern, integrated,
import-oriented locations of South Wales and North East England because of these reasons.
 Industrial relocation has very negative effects to the source regions from which industries are
moving away from. These include the following:

Effects of relocation on Losing area

1. Unemployment increases as industries move out leaving behind the labour force.
2. There is general out-migration of the economically active population as jobs are no
longer available.
3. As a result of these two effects, living standards will fall.
4. Increase in crime and prostitution is witnessed as people struggle for survival.
5. Abandonment sets in as buildings crack and collapse; paint peels off; sewage pipes
burst, water supply becomes erratic; as well as electricity provision and roads
develop unattended potholes: there is general neglect of housing and infrastructure
leading to the development of ghost towns and depressed regions.
6. Economic performance declines as shops close down and migrate out.
7. Deterioration of infrastructure such as cracking of buildings resulting in the creation
of ghost towns
 While sources regions of the industries suffer, all too often, the destination areas become the
beneficiaries which experience positive physical and economic effects which include:

Positive effects of industrial relocation on receiving area

  Exploitation of resources which are lying idle.
 Employment creation for the local population.
 Development of infrastructural services such as roads, rails, power,
telecommunications, health, education and recreation, insurance and banking.
 General raising of living standards.
Negative effects of industrial relocation on receiving area
 Rise in land prices due to increased demand
 High levels of pollution
 Increased population pressure on social resources such as schools, clinics, hospitals
 Population pressure on land and accommodation

Solutions to problems of industrial relocation

 Introducing new industries to the losing area
 Government can put policies to prevent relocation
 Government intervention through subsidies and tax incentives to industry to give lucrative
packages to those who do not relocate
 Provide more services such as water road network, schools and hospitals to avoid
population pressure on them
 Introduce stringent pollution control measures at industrial sites
 Reduce land prices at ghost town to attract other industries

Industrial relocation in Zimbabwe