ZIMBABWE – Pure Oil Industries, the manufacturer of ZimGold cooking oil has invested US$9 million to support farmers growing soya beans, a critical raw material in the production of edible oils, reports the Herald.
Zimbabwe which is facing shortage of cooking oil, has also limited availability of foreign exchange for importation of the major ingredients for manufacturing of basic commodities.
In an interview, the company’s head of operations, Rodreck Musiyiwa said they supply the domestic market with an average of 350 tonnes of refined cooking oil on a daily basis, if production is not interrupted.
Other companies in the space include Surface Wilmar, Willowton, Olivine Industries and United Refineries Limited, who are all experiencing shortage of raw materials that is, crude cooking oil and related inputs for edible oils.
Contract farming to address forex shortages
The company moved to contract farmers over the last three years in a bid to promote domestic production of the commodity to prevent reliance on imports for edible oils production.
Musiyiwa said the company supported farmers with inputs enough to put 200 000 hectares under crop and the assistance entailed fertilisers, seed and chemicals.
“This is our third year of (support to) contract farming.
And this is direct support to farmers where we give all the inputs from seed, chemicals, fertilisers plus agronomy services.
“This is our third year and if you look at a budget of US$1,000 per hectare and we have done this for three years that works to US$3 million, thus now US$9 million we have put in.”
According to him, contract farming has helped to meet shortage of soya beans and to some extend eliminated the need to import crude cooking oil.
“For us it is about supporting the value chain because, how is it cheaper; it is because this does not require foreign currency and we are supporting our own farmers,” Mr Musiyiwa said.
“Remember each time that we are importing, we are supporting farmers from other countries.
For us we don’t necessarily look at what is cheaper, we look at what is viable.
“What is viable is for us to support our own farmers, in the long term these farmers will be capacitated.”
Import crisis
Manufacturers, even those in other categories are not able to meet industrial demand, impacted by inadequate hard currency, low industrial capacity, low imports and lack of access to external lines of credit.
Since the era before the sitting president, Zimbabwe has been facing an economic decline coupled with lack of access to foreign exchange, prompting local producers to seek for external investment support to continue with production.
Zimbabwe was the leading producer of soya bean with national yields averaging over 100 000t per annum, but ever since the bulk of the raw material is being imported.
Zimbabwe loses US$200 million through soya bean imports per year with at least US$5 million required weekly to import soya bean, crude edible oils and related raw materials to meet the demand for cooking oil and other related products.