Olivine in $24m expansion drive

01 Jun, 2018 - 15:06 0 Views
Olivine in $24m expansion drive

eBusiness Weekly

Martin Kadzere
Olivine Industries Ltd, a local unit of Wilmar International, has embarked on a $24 million plant upgrade, as it seeks to expand its food portfolio with new products.

Wilmar, which holds a 65 percent controlling equity in Olivine through its local subsidiary Surface Wilmar Investments, also owns 95 percent of cooking oil firm in Chitungwiza.

Surface Wilmar chairman Narottam Somani told Business Weekly the plant upgrade would see products like ketchup, tomato sauce along with a brand new range of mustard sauce, mayonnaise salad dressing and culinary products, being introduced.

Olivine will also upgrade its margarine and bakery fats lines as well as installing a packaging line.

“This will not only allow Olivine to increase capacity of production, but to also make new products like low fat spread, and also reintroduce Paffax Puff pastry,” said Somani.

“Olivine will also start manufacturing bakery fats and shortening, stopped about 10 years ago, and is being imported by the bakeries biscuit producers.”

Narottam said the equipment had been acquired from Europe with implementation expected to start this quarter while commissioning is scheduled mid-2019.

In 2007, the Government took over H.J. Heinz Co’s 49 percent stake in Olivine through The Cotton Company of Zimbabwe (Cottco), a state enterprise until its privatisation in 1997, in a $6,8 million deal facilitated 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.

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, Cottco, then listed on the Zimbabwe Stock Exchange embarked on an unbundling exercise, which involved the disposal of Seed Co, another listed entity were it held 49 percent 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-fabrication of its margarine plant and installation of a new toiletry and laundry bar lines.

This resulted in the re-introduction of famous brands such as Perfection, Dolphin, Big Ben and Jade.

“Since October 2016, the company is now making profits every month,” said Somani.

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