Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zim: Minister loses patience with ‘defiant’ Tongaat Hulett

Zim: Minister loses patience with ‘defiant’ Tongaat Hulett

20 APR 2013 13:12 – RAY NDLOVU

Saviour Kasukuwere, indigenisation and empowerment minister, has turned up 
the heat on sugar grower Tongaat Hulett over its Hippo Valley unit.

Tongaat Hulett  is listed on the Zimbabwe Stock Exchange.

The Zimbabwe unit contributed 19% to Tongaat Hulett’s total interim revenue 
and 32% to operating profits in the half-year period to September 2012. 
Kasukuwere accused Tongaat Hulett this week of failing to comply with the 
country’s 51% indigenisation laws, which compel companies to transfer 
majority ownership to black Zimbabweans. A showdown is looming between 
Kasukuwere and Tongaat Hulett officials.

It is understood from sources at the National Indigenisation and Economic 
Empowerment Board in Harare that Tongaat Hulett officials were due to 
receive a letter from Kasukuwere on Wednesday instructing them to “either 
comply or move out of their Hippo Valley unit”.

In an interview with the Mail & Guardian this week, Kasukuwere said patience 
had finally run out with the sugar-maker over its dilly-dallying antics and 
failure to commit to compliance. “We are not relenting on Tongaat Hulett. 
They have been defying the country’s laws for a long time and now it is time 
for them to face up to their actions,” said Kasukuwere.

Indigenisation is the central plank of President Robert Mugabe’s re-election 
bid. He wants Zimbabweans to go to the polls in June and the stepping up of 
the indigenisation programme by Kasukuwere is widely interpreted as an 
attempt to curry more favour for Mugabe. Kasukuwere’s fierceness against 
Tongaat Hulett has also been spurred on by his failed bid last week to take 
over the banking sector.

Moves to take over the majority stake in Standard Chartered were resisted by 
Reserve Bank of Zimbabwe governor Gideon Gono, who warned the minister to 
back off the financial services sector.

Trevor Maisiri, a senior analyst based at the Johannesburg offices of the 
International Crisis Group, said it was difficult to pinpoint the cause of 
the renewed crackdown against Tongaat Hulett.

“It is difficult to tell what the case against Tongaat Hulett really is. The 
government is primarily alleging that Tongaat Hulett is not engaging with it 
over compliance and, should this be the case, Tongaat Hulett needs to 
engage,” said Maisiri. “However, if Tongaat Hulett has been engaging, then 
the indigenisation authorities are seeking to muscle the company out and 
what is taking place is the usual rhetoric to gain political mileage that 
has been a common feature of the indigenisation programme.”

Kasukuwere’s latest onslaught against Tongaat Hulett comes a week after a 
high-level Zimbabwe delegation – comprising Prime Minister Morgan 
Tsvangirai, Deputy Prime Minister Arthur Mutambara, Industry and Commerce 
Minister Welshman Ncube and Trade Promotion and Investment Planning Minister 
Tapiwa Mashakada – attended a Zimbabwe-South Africa investment summit in 
Johannesburg in a bid to attract foreign investment and dispel investor 
fears over the 51% indigenisation law and the looming elections.

Eric Bloch, a senior economist at H&E Bloch, said the latest row between 
Kasukuwere and Tongaat Hulett exposed the policy deficiency of the unity 
government, because “conflicting statements, mixed messages and political 
point-scoring” had become the order of the day in Zimbabwe.

“Primarily, foreign investors are not averse to indigenisation but want 
flexibility in choosing partners and a government that will keep their 
investments secure,” said Bloch.

Officials hosting an international trade fair in Bulawayo next week 
indicated that South Africa had the largest number of exhibitors for the 
fair and interest in Zimbabwe business remains strong.

Since last year, several large South Africa-linked companies have complied 
with the 51% indigenisation law – giving them room to expand their 
operations in the country. These companies include Impala Platinum’s 
subsidiary Zimplats, which earlier this year signed off on a $971-million 
deal through vendor financing. Indigenisation deals have also been sealed 
with Anglo American Platinum’s (Amplats) Mimosa mine, Unki Mine (a joint 
venture between Zimplats and Amplats), cement manufacturer Pretoria Portland 
Cement and Caledonia’s Blanket mine.

Anglo American Platinum is considering a new mine at a cost of $400-million, 
and in February PPC announced plans to build a $200-million cement plant. 
Zimplats is carrying out an expansion exercise at one of its main platinum 
mines in Ngezi, at $460-million.

The chairperson of the national indigenisation economic empowerment board, 
Mike Nyambuya, said nearly $1.56-billion had been raised for the 
indigenisation fund through empowerment deals. 


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