GMB negotiates for US$61m credit facility
http://www.theindependent.co.zw/
February 22, 2013 in Business
THE Grain Marketing Board (GMB) is finalising negotiations with a foreign
investor for a US$61 million credit facility to recapitalise the entity’s
commercial business unit as the cash-strapped parastatal steps up its
restructuring exercise.
Report by Gamma Mudarikiri
GMB chairman Charles Chikaura told businessdigest this week negotiations
were nearing finalisation but would not be drawn into disclosing the name of
the investor.
“We have identified lines of credit to capitalise our commercial business.
Work to access the facility is at advanced stages,” said Chikaura.
GMB’s commercial business comprises maize-milling, flour products, pre-packs
trading and bakeries.
The parastatal this week commissioned a new milling plant in Bulawayo as
part of plans to roll out five plants in major towns at a cost of US$3
million to be finalised by end of 2014.
Chikaura said the project was financed by internal resources and upon
finalisation, production capacity is estimated to increase to 10 000 metric
tonnes per month from the current 5 000 metric tonnes.
The first plant was launched in Harare in December last year, while other
milling plants will be installed in Mutare, Masvingo and Gweru.
Chikaura said the current monthly maize meal production comprised 36%
internal production and 64% subcontracted capacity through toll milling
arrangements was unsustainable in spite of the fact that maize meal is
currently contributing 50 % of total revenues.
GMB said 849 employees were retrenched from 3 150 in 2009.
Meanwhile, Bulawayo Metropolitan Governor, Cain Matema has lambasted GMB and
private millers over perennial failure to pay farmers on time, saying the
development was impairing the sustainable recovery and growth of agriculture
in the country.
“The failure by GMB to pay farmers on time is not sustainable to the growth
and recovery of agriculture,” he said.
“Farmers must feel comfortable that they have a ready market. It is
disturbing that the private players are also not paying a fair return to the
farmer while GMB has struggled to pay the farmer on time ,and this has
negatively affected cereal production in the country,” said Matema.
GMB is also failing to pay a debt of US$6 million owed to transporters and
is consequently failing to supply maize to millers throughout the country,
which culminated in a marginal hike in mealie-meal prices last month.
Mealie-meal prices marginally surged to US$5,40 for a 10kg pack from US$4,78
at GMB commercial outlets.
GMB however said the payment of transporters remains the obligation of
government and payment would be made as soon as treasury avails the funds.