Zimplow set to finalise acquisition of Barzem

Michael Tome  Business Reporter ZIMPLOW Holdings Limited, the country’s largest farming equipment manufacturer and distributor, says it is on course to conclude the acquisition of 49 percent shareholding in Barzem from Barloworld Equipment UK. Until the recent termination of the contract, Barzem was the official distributor of the heavy earth-moving equipment brand, caterpillar, in Zimbabwe. […]

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Zimplow set to finalise acquisition of Barzem

Michael Tome 

Business Reporter

ZIMPLOW Holdings Limited, the country’s largest farming equipment manufacturer and distributor, says it is on course to conclude the acquisition of 49 percent shareholding in Barzem from Barloworld Equipment UK.

Until the recent termination of the contract, Barzem was the official distributor of the heavy earth-moving equipment brand, caterpillar, in Zimbabwe.

This is expected to boost the performance of the group’s new business Tractive Power Solutions (TPS), which was established to cater for the provision of earthmoving and heavy equipment solutions to its customers.

According to Zimplow, TPS, which was launched during the course of the 2022 financial year, has been well received by the traditional clientele that the group has served through Barzem in the past. The move is meant to consolidate the group’s operations and performance after Barzem, a joint operation with Barloworld, halted its Caterpillar dealership in September 2022.

This position had a negative impact on the group’s overall performance for the year to December 2022.

According to Zimplow, the group is determined to safeguard shareholder value by acquiring Barloworld’s 49 percent shareholding in Barzem at a discount in line with the remedies provided” in Barzem’s shareholder agreement.

Zimplow Godfrey Manhambara said in the group’s financials to June 2023 the group was resetting to assert its status as the supplier of choice for agriculture, mining, infrastructure, and automotive equipment solutions.

“The group is on course to conclude the acquisition of 49 percent shareholding in Barzem from Barloworld Equipment UK.

“It is also on course to recover from the gap caused by the termination of the caterpillar distribution agreement at the end of September 2022 through the launch of two new business units namely Tractive Power Solutions and Valmec as well as the implementation of the Mealie Brand capacitation project,” said Mr Manhambara.

This comes as Zimplow on Friday, officially launched Valmec, a new farm equipment division as part of its portfolio diversification strategy. Valmec is a one-stop shop housing merchandise brands like Valtra, Mosh, Sparex, and Farmer Ziraat.

According to Zimplow, the launch of the Valmec division is targeted at supporting entry-level or emerging commercial farmers who had not been covered by Zimplow in the past.

Farmer Ziraat will cater for the supply of cost-effective land preparation and tillage equipment from disc harrows, ploughs, and rippers while Mosh will cater for the supply of seeding equipment, fertiliser application and crop protection equipment.

Sparex will offer after-sales support or backup support, this aftermarket range focuses not only on the Valtra (Tractor brand) but also on well-known tractor brands like Case, Landini, Massey Ferguson, John Deere, and New Holland.

Zimplow group chief executive officer Mr Vimbayi Nyakudya said the launch of the Valmec division was meant to ensure that the clientele receives the necessary range of implements with a good pricing position, and the best customer experience.

“In terms of strategy, we want to be a one-stop shop, we want our customers to have the greatest convenience when they come to buy equipment. We are answering to the Government’s call of leaving no one and no place behind so we are becoming inclusive, thus establishing a one-stop shop. We are also following through the mandate of the Ministry of Agriculture to mechanise every farmer because the farmer is at the centre of what we do, so we are going to look at more ways to capacitate the farmer,” said Mr Nyakudya.

In terms of performance in the half-year period to June 2023, Zimplow recorded a 77 percent growth in revenue to $52 billion attributable mainly to notable growth in farming implements sales, while profit remained flat compared to the prior year.

Mealie brand implements sales contributed 88 percent to the total revenue in the period under review.

Implements sold in the local market were 69 percent ahead of the prior year whilst exports were depressed by 56 percent below the prior year mainly due to the slow uptake.

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Government upscales service delivery

  Addressing the Central Committee on the back of the ruling party’s emphatic win in the August 23 harmonised elections, President Mnangagwa said Zanu PF is the only party that can uplift Zimbabwe into prosperity. Joseph Madzimure-Senior Reporter The Government will be prioritising and scaling up provision of social services such as quality healthcare, education […]

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Govt upscales service delivery 
Addressing the Central Committee on the back of the ruling party’s emphatic win in the August 23 harmonised elections, President Mnangagwa said Zanu PF is the only party that can uplift Zimbabwe into prosperity.

Joseph Madzimure-Senior Reporter

The Government will be prioritising and scaling up provision of social services such as quality healthcare, education and provision of decent housing, President Mnangagwa has said.

Addressing the Central Committee on the back of the ruling party’s emphatic win in the August 23 harmonised elections, President Mnangagwa said Zanu PF is the only party that can uplift Zimbabwe into prosperity.

“Zanu PF remains the only party implementing sound policies to transform, modernise and industrialise our country for the benefit of all our people, leaving no one and no place behind” said President Mnangagwa.

Additionally, President Mnangagwa said the Second Republic, had scored remarkable developmental achievements in various sectors of the economy.

He urged the party to mobilise and actively participate in the rural industrialisation programme.

Food security at household and national levels, he said, had been sustained through interventions such as the Pfumvudza/Intwasa and the Presidential Borehole Drilling Programme.

The mining and transport sectors, he said, also continue to register significant growth.

Outstanding infrastructure development projects will be “quickly completed” and new projects will be rolled out in all provinces.

“I am aware that the state of some road networks in the various provinces need attention. These will be attended to,” he said.

President Mnangagwa, who is the First Secretary of the party, implored Central Committee members as the highest decision-making body of the party outside Congress, to nurture a culture of open, frank, objective and factual discussions to enhance operational efficiency and effectiveness.

“Party business, policies, programmes and activities must be undertaken with the big-picture and long-term projections in mind, beyond Vision 2030.

“Informed by the lessons and experiences of the last five years, it is important that we drive continuity of the people-centred development revolution,” said President Mnangagwa.

Party supporters, President Mnangagwa said, must be mobilised towards taking ownership of national development.

“Government is a product of the party. As such, we should continue to guide Government as it implements our party policies and programmes for the betterment of livelihoods of all Zimbabweans.

“The Central Committee should provide the requisite strategic leadership,” he said.

“We expect you, as the highest decision-making body outside Congress, to give direction and superintend over the achievement of the set national development aspirations and targets.

“More must be done in areas of under-performance to accelerate equalised development and a shared prosperous future across all communities.”

The party and its Central Committee, he added, must always listen to the people and address their needs.

The ruling party will hold its 20th National Annual People’s Conference in Gweru, Midlands province, on October 28 and 29 at the party’s conference centre.

The conference is expected to reflect on the policies, programmes and projects that must be accelerated to improve the quality of life of Zimbabweans.

President Mnangagwa said the thunderous defeat of puppet political parties” represented a rejection of neo-colonialism and “subjugation of our detractors”.

“We strongly condemn the opposition who are rejecting constitutionalism and democracy in our country by disregarding our laws, institutions and processes.

“Informed by our message and demonstration of unity, love and harmony, we delivered a free, fair, peaceful, transparent and credible election.

“Together as a united people, we shamed our detractors who had wished for division, violence and even bloodshed in our country,” he said.

“Zimbabwe, under Zanu PF, will never be a banana republic, a free for all. This is the reality that the leaders of the opposition, their supporters and their handlers must face,” he said.

President Mnangagwa said those in opposition must respect the will of the people expressed through the polls.

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Tongaat shareholders set to receive nothing

Investors in Tongaat Hulett appear virtually certain to receive nothing for their shares in the severely financially distressed JSE-listed sugar producer and property company. Peter van den Steen, one of the joint business rescue practitioners (BRPs), said last week it was already envisaged in the first version of the business rescue plan that it is […]

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Tongaat shareholders set to receive nothing

Investors in Tongaat Hulett appear virtually certain to receive nothing for their shares in the severely financially distressed JSE-listed sugar producer and property company.

Peter van den Steen, one of the joint business rescue practitioners (BRPs), said last week it was already envisaged in the first version of the business rescue plan that it is the intention to delist Tongaat Hulett and this will go into the amended business rescue plan, which is expected at the latest to be published by 31 October 2023.

Van den Steen said the business assets are to be sold out of the legal entities and it is envisaged the remaining legal entities will be wound down and ultimately liquidated.

    “The shareholders will retain their shares but will receive no value for their shares,” he said.

“Unfortunately and regrettably that is not the news that … people wanted to hear. I am very sorry to be the bearer of bad news.

“We often do remind folks in the room that we didn’t form part of the breaking of it. 

“We get to try and help as much as we can. We are trying to give it a good tonk.”

The company has been in business rescue since October 2022.

Trading in its shares was suspended by the JSE on 19 July 2022 because of its failure to publish its financial results within the stipulated time period.

The BRPs previously announced that Tanzania-based Kagera Sugar had been selected as the preferred strategic equity partner to acquire all of Tongaat’s sugar assets, including Tongaat Hulett Limited (THL) in South Africa and its investments in Mozambique, Zimbabwe and Botswana.

Van den Steen said the proceeds from the Kagera Sugar sale are estimated to be R3.6 billion plus the assumption of the post commencement finance (PCF) facility of about R1.7 billion. He said the proceeds from Tongaat Developments are estimated to be about R600 million against business rescue claims of R11,5 billion, which puts a negative equity value of R5.6 billion on THL.

“There are no prospects of there being an excess of asset value over liabilities, which would produce positive returns to shareholders even if it [the various businesses] were to be broken up,” he said.

    Van den Steen added that the gap between the realisable value of THL assets from credible bidders and claims against Tongaat is too wide to bridge.

He said that if more value was to be gleaned from the assets through an alternative process, the creditors directly gain from any uplift in value before shareholders see any realisation.

“Secured creditors have the dominant business rescue vote at BR 80 percent. Creditors [not shareholders] will have the last word,” he said.

The Financial Sector Conduct Authority (FSCA) fined THL in August 2002 after it found the company made false, misleading or deceptive statements, promises or forecasts in its public statement to the markets over six years prior to the publication of its 2017 and 2018 annual financial statements.

The FSCA imposed an administrative penalty of R118,34 million on Tongaat for contravening the Financial Markets Act but noted Tongaat’s then financial position and, to avoid penalising innocent Tongaat shareholders further, decided to remit a portion of the administrative penalty and issued an order for Tongaat to pay a penalty of R20 million.– Moneyweb

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Rains expose Byo’s street drainage

  Bulawayo Deputy Mayor Donaldson Mabutho Bulawayo Bureau TORRENTIAL rains over Bulawayo on Saturday exposed the city’s poor storm drainage as evidenced by roads being waterlogged, made worse by undesignated vending operations and littering.  Due to the clogged drainage, the city centre is prone to flash flooding, which exposes motorists and pedestrians to hazards as […]

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Rains expose Byo’s street drainage 
Bulawayo Deputy Mayor Donaldson Mabutho

Bulawayo Bureau

TORRENTIAL rains over Bulawayo on Saturday exposed the city’s poor storm drainage as evidenced by roads being waterlogged, made worse by undesignated vending operations and littering. 

Due to the clogged drainage, the city centre is prone to flash flooding, which exposes motorists and pedestrians to hazards as well as damage to road infrastructure. 

There was rampant littering in the city centre mainly on streets, with major vending activities such as Sixth Avenue and the vegetable market side.

A lot of the garbage finds its way into the drainage system while some vendors also have a habit of stashing their wares and waste in the drainage. 

Waterlogging coupled with potholes made driving a nightmare in the city.

Following the downpour, the city’s major roads such as Queen Lozikeyi Street, George Silundika Street, and Robert Mugabe Way, which are susceptible to flooding, resembled a river delta because of the poor drainage.

Some people were crossing flooded streets barefoot with shoes in their hands while some parents had to assist their children in crossing the streets.

In interviews, residents yesterday slammed Bulawayo City Council for failing to address the issue of flooding, which has since become a perennial problem during the rainy season.

Residents said if not addressed, the city is likely to witness the recurrence of an outbreak of waterborne diseases such as cholera. Pools of water are also a breeding ground for mosquitoes.

A resident, Mr Billy Ncube, said it was time for the council to walk the talk in terms of service delivery and challenged the new councillors to find a lasting solution to the city’s major challenges to avert disaster.

“We are fed up with promises and lies, and we are saying the newly elected councillors must prove to the electorate that they were chosen to serve. This culture of people being elected to line their pockets while service delivery suffers cannot be tolerated,” he said.

“As residents, we want to see Bulawayo retaining its former glory. If you look at the situation along Maria Msika Avenue where vendors operate, it’s a disaster because there are no working drainage facilities and the entire place was flooding.”

Mr Ncube said vendors operating in the area are worsening the situation by dumping solid waste everywhere and in the process blocking the storm drainage.

Bulawayo Progressive Residents Association (BPRA) chairperson Mr Ambrose Sibindi said they had received complaints from residents about the poor drainage.

“There is a lot of dumping and littering by vendors, especially along Maria Msika Avenue resulting in the clogging and blocking of the city’s drainage. When it comes to the council, they need to enforce anti-littering laws and the local authority should also ensure that drainage systems are unclogged before the rainy season,” he said.

Mr Sibindi said as residents, they have an obligation to desist from littering the streets.

 “There is a growing concern where you have people coming to the city centre to dump their rubbish in the city. Bulawayo City Council has a refuse collection regime, which it must follow, and we urge councillors to work hand in hand with all stakeholders to ensure an effective flow of service delivery,” he said.

Bulawayo United Residents Association chairperson, Mr Winos Dube, said the city’s poor drainage is causing serious damage to the city’s infrastructure.

“It is very disappointing to note that we have systems in place to prevent such situations, but they are not considered resulting in our drainage systems collapsing. We have a scenario where the local authority is failing to do proper planning ahead before the rainy season,” he said.

Mr Dube urged the city council to adopt technology by procuring machinery and equipment for unclogging.

“Residents are worried about their property and lives. Some houses get flooded and lots of people lose their property. We challenge the new council to strive for the best and not be a disappointment to the city,” he said.

Deputy Mayor Councillor Donaldson Mabutho said council is aware of the challenges facing the city, and promised that they will look into them as a matter of urgency.

“These are pertinent issues, which are being raised by residents and their associations. There are some neighbourhoods and houses that are prone to flooding during the rainy season and we are working with engineers and housing offices to ensure that they engage residents on preventative measures,” he said.

“As we speak, we will be engaging our engineers to look into the city’s drainage systems as a matter of urgency.

“We have identified several roads such as Basch Street, Benjamin Burombo Street, Cephas Cele Avenue and Lobengula Street where there is a high concentration of vendors, and we will be deploying out teams to address the problem.”

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Innscor sinks US$125m into expansion over 2 years

  Innscor Africa said volume growth at its poultry division, Irvine’s, was concentrated in the table egg and day-old chick categories, after growing by 14 percent and 7 percent, respectively, during the year to June 30, 2023 (File Picture) Nelson Gahadza Zimbabwe’s largest diversified group, Innscor Africa, says it has invested nearly US$125 million over […]

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Innscor sinks US$125m  into expansion over 2 years 
Innscor Africa said volume growth at its poultry division, Irvine’s, was concentrated in the table egg and day-old chick categories, after growing by 14 percent and 7 percent, respectively, during the year to June 30, 2023 (File Picture)

Nelson Gahadza

Zimbabwe’s largest diversified group, Innscor Africa, says it has invested nearly US$125 million over the past two years towards the expansion of capital projects across its various business units.

Group chairman Mr Addington Chinake, commenting on the group’s financials for the year ended June 30, 2023, said the investment programme has allowed the establishment of new business units and products and enabled the expansion and modernisation of existing manufacturing lines.

He said this has also extended existing product categories and will ultimately enhance the overall manufacturing efficiencies and capabilities of the group as critical mass is reached.

“Much of this investment has recently been commissioned or is in the final stages of commissioning, and in the period ahead, we will deploy considerable focus and energy on ensuring these exciting new investments operate according to the necessary operating models, driving positive returns to shareholders,” he said.

He added that the group understands its responsibilities to the nation in providing world-class quality products at affordable prices and will continue to pursue expansion programs with this objective in mind.

Innscor is a focused group of light manufacturing businesses that, together with various strategically integrated agricultural operations, produce a number of Zimbabwe’s iconic brands in the consumer staple product space.

Mr Chinake said during the period under review, the group’s protein, stockfeeds, beverage, and light manufacturing segments delivered positive volume growth over the comparative year, while the impact of international wheat pricing carried over from the previous financial year had an adverse impact on the Mill-Bake segment.

Innscor’s investment drive underpinned the overall volume trajectory, with focus being deployed on expanding plant capacities, enhancing manufacturing capabilities, and product extensions, while route-to-market initiatives continued to be refined in order to drive volume into new markets.

From a trading perspective, Mr Chinake said the business models continue to undergo constant refinement to ensure they remain agile and relevant in a dynamic operating environment.

“It is vital that our expansion programs yield world-class quality products and that our increasing manufacturing capacities across our business units translate into economies of scale, resulting in excellent pricing for our customers,” he said.

Group revenue for the year under review grew 14,7 percent to US$804,040 million, driven by improved capacity utilization across the group’s core manufacturing businesses and further supported by the introduction of new product categories, category extensions, and route-to-market optimization strategies undertaken.

Mr Chinake said the group saw a mild contraction in margin efficiency terms of 3,7 percent, and this resulted mainly from reduced gross margin yield where the full increase in the core bills of materials could not be fully recovered in the sales price as units sought to minimize the impact of price increases on the consumer and maintain volume momentum.

In terms of the operations review, volume growth for the bakery division was muted compared to the comparative year, mainly on account of the pricing dynamics experienced early in quarter one, as inflated international wheat pricing resulted in an adverse effect on bread pricing for the consumer.

Mr Chinake said loaf volumes from quarter two through quarter four increased substantially, however, as local wheat stocks improved and international pricing softened.

The group recently completed the commissioning of its US$22 million investment into a state-of-the-art, fully automated production line in Bulawayo.

At National Foods, aggregate volumes contracted by 3 percent over the comparative period, mainly driven by the performance of the flour division. Volumes in the flour unit contracted by 12,3 percent versus the comparative year, driven largely by significant increases in the price of wheat.

“The flour division completed the installation of a new Buhler mill in Bulawayo, which will increase wheat milling capacity and operational efficiency across the division, while maize volumes declined by 9,4 percent versus the prior year.

In the protein category, at Colcom Foods, demand for fresh pork remained firm, resulting in volume growth of 8 percent, supported by double-digit growth across the sausage and polony categories over the comparative year.

Volume growth for the bacon and ham category was muted in the comparative year, reflective of the category’s reliance on the formal retail channel. At Irvine’s, volume growth was concentrated in the table egg and day-old chick categories, growing 14 percent and 7 percent, respectively, over the comparative year, while the frozen chicken category continued to operate at capacity, and volumes closed at the same level as the comparative year.

Mr Chinake said investments targeted at increasing breeder and laying capacity and hatchery extensions have been primary growth drivers, and the business looks ahead to initiating capacity enhancement investments for the frozen chicken category.

In the beverage division, Prodairy continued to register solid volume growth, with overall volumes closing 44 percent ahead of the comparative year.

The Dairy Blend category operating under the “Revive” brand benefited from prior capacity expansion investment, and volumes closed 83 percent ahead of the comparative year.

Mr Chinake said a similar growth of 73 percent over the comparative year was registered in the Steri-milk category, while the “Life” UHT milk, butter, and cream categories also delivered strong volume growth of 5 percent and 23 percent, respectively.

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