BY MTHANDAZO NYONI THE country’s biggest cooking oil manufacturer, Surface Wilmar says its US$24 million plant that is under construction in Harare will commence production in September.
The plant was shut down in 2017 due to inefficiencies.
In an interview with the NewsDay Business, Surface Wilmar chief executive officer Sylvester Mangani said the plant would produce margarine and mayonnaise, among other products.
“Right now, we are expanding the margarine factory and the ketch-up factory, that’s our priority,” he said.
“So we are trying to get that sorted out. Obviously, beyond that, there are other expansion projects that we are looking into, stockfeed and milling business. Our target investment (for the) margarine factory is US$24 million. We are targeting to have that US$24 million spent by the end of the year.
“We are progressing very well and I think by the end of September, we should have the margarine factory fully running and by the first quarter of 2023, we should have the ketch-up (plant running). We are 75% for the margarine and ketch-up (factory).”
Mangani, who is also chief executive for Olivine Industries, said the company was operating at 15% of its installed capacity due to forex challenges.
“Capacity utilisation is still constrained because of issues of accessing forex. I think the auction (system) has not been very active, so we are trying to get money through letters of credit. Hopefully, as we go to the second quarter, we should see an improvement,” he said.
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“What is complicating working capital arrangements is the cost of oil on the international market, it has gone up because of COVID-19 and the Ukraine war.
“The oil that we used to buy for US$1 000 just two years ago, we are now buying at more than double that price. Soya crude oil prices have gone up and it looks like they will firm and as long as that Ukraine war is like that, freight costs are high.”
Mangani added: “We are going to see very high costs. With that very high cost it then means we need more capital. Where we used US$8 million as a requirement to run properly, now we need something like US$12 million because of the higher crude prices.”
Surface Wilmar has also put in place a revival plan for Olivine Industries, which will result in a US$50 million upgrade of the Willowvale plant in the capital.
The plant targets maize and wheat milling as well as production of pasta, stockfeed and biscuits.
Surface Wilmar executive chairman and Olivine Industries country head Narottam Somani said the upgrade was set to be completed by 2025.
Government is the single largest shareholder in Olivine, with 35% shareholding. External shareholders collectively hold the balance.
Surface Wilmar is 90% owned by SR Amando, an investment vehicle which includes the Somani family and Wilmar International.
The Industrial Development Corporation Zimbabwe owns 10% of the company.
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