Zimbabwe based confectionery manufacturer Arenel suspends US$6m flour milling plant project

ZIMBABWE – Zimbabwean confectionery company, Arenel Sweets & Biscuits, has put on hold its US$6 million flour milling plant project after failing to secure Special Economic Zone status.

Arenel produces a range of sweets and biscuits under the brand names Yummies, Marie, Malewu drink’, Apricot sweets, Rocco cream biscuits and Raptor sports and energy drink.

According to reports by The Herald, the company was seeking the SEZ status to benefit from fiscal and non-fiscal incentives meant to attract investment.

The government of Zimbabwe gazetted the Statutory Instrument (SI) 154 of 2018 in August 2018, bringing Special Economic Zones into full operation.

Companies operating outside Special Economic Zones are subject to 25 percent corporate tax whereas those within the zones pay nothing for the first five years and 15 percent thereafter.

The tax rate remains the same for as long as a company continue to operate within the zones or unless Government policy changes.

Another incentive is that companies with SEZ status can import equipment duty free but must prove the equipment will be utilised in SEZs.

“This was not granted because the company failed to qualify for the status. For now, the flour milling project is suspended but they will continue engaging the authorities over the matter,” said an official close to deal that declined to be identified.

Some companies that have been granted the SEZ status include Surewin Pvt Ltd, Zimbabwe Iron Steel Company of Zimbabwe, ferrochrome producer Afrochine , Southpole Consulting, Lentsloane, Tradekings Zimbabwe, Ecosoft, Nkonyeni Agriculture and Bernard Development Corporation.

Through the establishment of the milling plant, Arenel was seeking to expands and diversifies its operations.

The plant would produce a special flour that the company requires to produce biscuits and pastas like spaghetti and macaroni. It also intended to supply the surplus to the local market.

Arenel would have contracted farmers under a wheat out grower scheme to support the milling business.

Meanwhile, the company is proceeding with its investments in carbonated soft drinks, pasta, jelly and bottle moulding plants.

The soft drinks plant is expected to start operations during the last quarter and will have a processing capacity of two and three million litres of soft drinks per month.

The firm exports some of its products to countries such as Zambia, Malawi, Democratic Republic of Congo, Botswana and South Africa.

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