Two events that appear unrelated happened last week. First, Nestle Zimbabwe on Wednesday commissioned a fourth roller dryer at its Harare cereal production plant as the food and beverage giant seeks to boost output.
The US$7 million investment is tipped to grow output by 35%, improve supply chain efficiency and reinforce Zimbabwe’s role as the Nestlé Cerevita hub for Africa’s eastern and southern regions.
It was at the commissioning of the roller dryer that Nestle announced plans to install the fifth one to expand cereal production.
Currently, Nestlé’s monthly cereal output averages 730 tonnes.
The initiative is part of Nestlé’s broader investment of more than US$40 million in Zimbabwe over the past decade, reinforcing its long-term commitment to the country’s growth and development.
“So, we are already thinking about the next one (roller dryer). We are very, very focused on this country because if we do not continue to invest in Zimbabwe to develop this Cerevita, we cannot grow the business in the country, in and around,” ESAR chief financial officer John Ashley told NewsDay Business last week.
Second, President Emmerson Mnangagwa commissioned National Foods’ new lines for biscuits, pasta and breakfast cereals as the consumer staples concern continues with its expansion drive.
The US$6 million pasta plant will produce 1 200 tonnes of short-cut pasta monthly, about a fourth of the country’s requirement. Zimbabwe consumes 5 000 tonnes of pasta per month, which is imported.
- Mr President, you missed the opportunity to be the veritable voice of conscience
- ED to commission new-look border post
- Zanu PF ready for congress
- EU slams Zim over delayed reforms
Keep Reading
The US$7 million breakfast/cereal production line’s final cost came in at US$7 million, with a targeted capacity of 800 tonnes.
Mnangagwa urged National Foods to ramp up production and increase exports, which will generate more foreign currency for the economy.
The investments by these bellwether firms are evidence that these corporates are here to stay, which is a confidence booster to those who intend to set up shop in the country.
The expansion of firms means more revenue will flow into government coffers through taxes.
However, such a commitment needs to be reciprocated by a favourable policy regime that promotes investment. The private sector is doing its part. The government needs to come to the party by providing a conducive environment for businesses to thrive.
Such a conducive environment should be free of policy flip-flops, bottlenecks and aggression by authorities.
There are reports of companies that are on the edge after being presented with additional tax bills, following an assessment by the tax authority that they should have paid their obligations in foreign currency instead of local currency. If the situation is not managed, it could stymie their growth and lead to closures.
There are also concerns after the central bank raised the retention threshold to 30% from 25%, firms would surrender for local currency.
While the retention is crucial in building reserves critical to oiling the economy, it should not suffocate companies. When companies raise c oncern, authorities must listen, not the “no going back syndrome” we have seen over the last months.
Former US Secretary of State Colin Powell once said capital is a coward. It flees from corruption and bad policies, conflict and unpredictability. Capital goes where it is welcomed and where investors can be confident of a return on the resources they have put at risk.
