US$825 Million Corporate Loan Expended by AfDB to the Olivine Industries Limited in a bid to Augment Food Exposition Growth in Zimbabwe
By Abdul Rahman Bangura –
NEW AFRICA BUSINESS NEWS ( NABN ) Freetown, Sierra Leonne- US$825 Million has been paid by the Board of Directors of African Development Bank to the Olivine Industries Limited – a local unit of Wilmar International, seemingly to construct two plants in concert with the company’s aim to expand its food portfolio with recent products. Wilmar, being recorded on the Singapore Stock Exchange owns 65% regulating equity in Olivine through its local subsidiary, Surface Wilmar Investments, which also owns 95% of the cooking oil producer in Chitungwiza.
Africa Development Bank in a furlough started, the loan will see the company building a new margarine plant and a new tomato sauce line.
“The board of directors of the African Development Bank Group has approved a US$825 million corporate loan to Olivine Industries Limited to support the company’s food production expansion plan in Zimbabwe,” the bank said in a statement.
“The bank’s loan, approved on Wednesday, will enable the company to construct new processing plants for margarine and tomato sauce and install upgraded machinery with advanced technologies. Olivine plans to increase its domestic and regional production capacity and food supply.”
Atsuko Toda – AfDB Director of Agriculture Finance and Rural Development remarked, the bank endured with devoted exertions to deliver long-term financing to Zimbabwean demand to promote investments in the country’s husbandry value chain.
Toda mumbled, Olivine submitted an excellent alternative for AfDB to partake in overhauling agrarian value chains in Zimbabwe, thereby creating jobs, improving food security and nutrition while reducing the country’s dependence on food imports.
Formerly, when Olivine’s proceeds extends a suitable level, this venture could potentially support 200 to 300 local farmers through Olivine’s corporate farming model to be developed in the near future.
Sylvester Mangani – Surface Chief Executive ebbed to remark asserting “we can only do that once we have received a confirmatory note from the bank”. Regardless, in authorizing the loan, AfDB pointed out that, the trade entrusted a good opportunity for the bank to exacerbate effective private sector intervention in a transition state, while also promoting the “Feed Africa” agenda that forms part of the Bank’s High 5 strategic priorities.
In 2007, the Government took over H.J. Heinz Co’s 49% stake in Olivine through The Cotton Company of Zimbabwe in a $6.8 million deal enabled by the Industrial Development Corporation. Then, relations between Olivine and Government had strained on allegations that the firm had stopped producing cooking oil after being barred by the US government from buying raw materials from black farmers who had taken over land previously owned by white farmers after a successful land reform programme.
Prior to the deal, the Government owned 49 percent in Olivine, in a partnership forged in 1982 and in terms of which the US food company had a contract to manage the business.
In 2013, AICO, Cottco parent company, then listed on the Zimbabwe Stock Exchange embarked on an un bundled exercise, which affected the discarding of Seed Co, another listed entity were it held 49% and Olivine, to raise money needed to pay off huge debts. Olivine was a loss making enterprise at a time it was taken over by Wilmar International.
Since then — there has been a lot of redevelopment of business model, started with re-sign a of its margarine plant and installation of a new toiletry and laundry bar lines. This stemmed in the re-introduction of celebrated labels such as Perfection and Jade.
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