eBusiness Weekly
Martin Kadzere
Deputy minister of agriculture Valengis Haritatos said this week Government will not allow the takeover bid of The Cotton Company of Zimbabwe by rivals, insisting those with money to invest in the cotton industry should consider parallel programmes.
The Government, through Zimbabwe Asset Management Company, a special purpose vehicle created by the Reserve Bank to rescue debt ridden local entities and to hive off non-performing loans that were threatening the stability of the financial services sector, is in the process of acquiring Cottco through assuming its $56 million debt.
Cottco almost went into liquidation in 2014 after the management had declared the company technically insolvent. However, the Government through inputs subsidies helped the company get back on its feet.
During the past three years, intake figures for Cottco rose to 128 000 tonnes from 10 800 tonnes.
This saw national output growing to 142 000 tonnes from 28 000 tonnes – the lowest yield in nearly two decades.
Households – mostly marginalised – supported by the programme have also risen from 75 000 to 400 000 while nearly 5 000 direct jobs were created, up 500 in 2015.
According to the central bank, cotton lint exports are likely to reach $90 million this year, a significant from about $24 million realised last year.
Investor stampede
Early this year, Wilmar International’s local unit, Surface Wilmar Investments, launched a bid to acquire a majority shareholding in Cottco, arguing it wanted to secure guaranteed supply of feedstock for its edible oils plant in Harare, it has emerged.
The Business Weekly also understands that some former Cottco rivals are also angling for a shareholding in Cottco and have been making various proposals to the Government.
Agriculture deputy Minister Valengis Haritatos said on Monday it was unfair for the some companies to start stampeding for Cottco shareholding because it was now out of the woods.
“We went through a rough stage and now we are on a rebound,” he said while addressing a stakeholder workshop organised by Cottco in Kadoma to create awareness of the Government free inputs scheme.
“Only when we are on a rebound, we now have people trying to hijack us. If we were able to get out ourselves of the mess, why should we not enjoy the fruit of our handwork – our Government’s hard work. Now they want to hijack. Is it because they have money.
“That’s my position as your deputy minister. And I will defend that position. I am a firm believer that we went through a lot. I am saying that if an investor want to come, let them join but with a parallel programme.
You must exist in your independence. And if somebody has got $10, let them go to virgin lands. Any form of investment must assist us not hijack us. So I want that to be on record,” he added.
More and more production
Addressing the same meeting, Cottco head of corporate services Ben Mugura-Gumeni said the company was now working towards value addition projects – apart from ginning in the short term to medium term. He also highlighted that Cottco was working on boosting production in areas that had abandoned the crop.
These include the Kadoma and Chinhoyi catchment areas. Apart from financing farmers. Cottco also operates six ginneries in Kadoma, Chiredzi, Sanyati, Gokwe, Muzarabani and Chinhoyi with combined annual capacity of about 130 000 tonnes.
