ZIMBABWE – Zimbabwe’s largest sugar producer Tongaat Hulett (Tongaat) says it is seeking $20 million from various financial institutions earmarked for the development of 4 000 hectares it was recently allocated by government.
Tongaat chief executive Sydney Mutsambiwa, on Thursday told Parliament’s Indigenisation and Economic empowerment committee that this company was given the greenlight to develop the land by the minister of Lands and Rural Resettlement Douglas Mombeshora.
“We have received indications from financial institutions to the tune of $20 million to develop the first phase of that project. So…we have been authorised by government to utilise that land for the benefit of the out growers because we do not actually own that land ourselves,” said Mutsambiwa.
The new 4 000 hectares is for resettlement by 138 farmers who had been given offer letters in 2011.
This comes as the company recently said it plans to increase its annual sugar production by 400 000 tonnes over the next four years without having to invest in new mills, but largely on expected improvements in yields and extraction rates.
The sugar producer —majority owned by South Africa’s Tongaat Hulett — has been under immense pressure to comply with the country’s indigenisation laws which compel foreigners to cede 51 percent shareholding to locals or embark on economic empowerment programmes in lieu of ceding shareholding.
Mutsambiwa conceded that Tongaat has not yet complied with the indigenisation regulations despite submitting a proposal in March 2012.
The firm’s legal counsel, Sternford Moyo of Scanlen and Holderness said 35,4 percent shareholding of locally listed Hippo Valley Estates (Hippo) was held by locals comprising of the National Social Security Authority and various pension funds.
Tongaat holds 50,3 percent in Hippo while it wholly owns Triangle representing a combined installed sugar milling capacity of more than 640 000 tonnes.
“A portion of the shareholding is owned by indigenous Zimbabweans already. Complying with the Indigenisation Act as far shareholding is concerned is in two elements, firstly you either dispose of 51 percent shareholding or alternatively you pursue social and economically desirable activities.
“The minister allocates a percentage to be allowed (as shareholding) in credit of the sale of shares,” said Moyo.