Nestle not compliant yet
By Editor
Thursday, 08 December 2011 10:40
HARARE – Nestle Zimbabwe Private Limited (Nestle) is yet to submit a revised
indigenisation compliance proposal, chief executive Kumbirai Katsande has
revealed.
Indigenisation Minister Saviour Kasukuwere rejected Nestle’s initial
proposal last month saying it was insufficient and fell far short of the
minimum 51 percent indigenous shareholding as required by the Indigenisation
Act.
Nestle had proposed to dispose of 25 percent equity to the Nestlé Zimbabwe
Pension Fund, while the remaining equity would go to the firm’s employees
under an employee ownership and empowerment scheme.
The Swiss-backed food processor has been under spotlight after a spat with
President Robert Mugabe over the rejection of milk from his Gushungo Dairy
Farm citing that it was substandard and contaminated, prompting Mugabe to
publicly assign Kasukuwere to nationalise the company.
Speaking at the company’s commercial dairy revival project in Kwekwe on
Tuesday this week, Katsande said the company was yet to resubmit their
proposal pending housekeeping issues at the food giant.
“We are yet to submit our proposal. The direction we have is that we will
soon submit,” he said, adding he had no capacity to answer questions
relating to the compliance plan since he was answerable to the company’s
shareholders.
According to government’s indigenisation requirements for the manufacturing
sector, foreign-owned firms must cede only 26 percentage shareholding to
locals, and work to increase the share holding to 51 percent over four
years.
Details of the resolution indicate that the foreign manufacturing firms may
maintain the 26 percent threshold for locals, but must increase the
threshold to 46 percent in the third year before finally meeting 51 percent
in the fourth year.
Nestle is set to spend over $14 million over a period of seven years towards
resuscitating the country’s dairy herd, through contracting small scale
farmers.
Katsande said capacity utilisation among dairy processors remains below 30
percent due to reduced milk production and so the company said it was
committed to improve it by working with local dairy farmers.
The programme will establish milk production and collection centres
throughout all the provinces of the country.
“Working with local dairy farmers can revive the country’s dairy industry to
the great heights of yester years when national milk production was 260
million litres per year and the country had over 200 000 dairy cows,” he
added.
Currently Zimbabwe’s national milk production is a measly 50 million litres
while the country’s national herd of dairy cows is less than 40 000.
Nestle plans to face lift its Harare plant at a total cost of $27 million
are steaming ahead despite calls by government for the firm to fully
indigenise, in a move that indicates confidence in its local operations.