HIPPO VALLEY ESTATES, a unit of South Africa-based Tongaat Hulett, has submitted its compliance plan to the government in a bid to meet indigenisation and empowerment regulations compelling foreign-owned companies to dispose 51% equity to blacks.
Report by Victoria Mtomba Business Reporter
Although details of the proposed plan remain sketchy, an Indigenisation and Economic Empowerment ministry official who requested anonymity, said the agro-based concern has partially complied with the law several months after the government had ordered the company to do so.
“Triangle has complied with the law. There is something going on now. Most of the things that were expected to be done last year will be finalised this year going forward,” the official said.
The official added that a community share ownership scheme will be launched this year in Masvingo.
Hippo Valley Estates is a unit of Tongaat Hulett of South Africa that owns 50,3% of the Zimbabwe Stock Exchange-listed company.
The National Indigenisation and Economic Empowerment board last year wrote to the company to dispose of 43% of its shares to locals that would constitute 10% for the community share ownership trust and 5% for employees. Tongaat Hulett generated $53 million from its sugar operations in the interim period ending September 30, 2012.
Profit after tax for the group declined by 19,2% to $11,1 million due to a wage increase of 18%.
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The company employs 18 000 people. The company projects 490 000 tonnes of sugar this year compared to 259 000 tonnes of sugar realised in the 2009-2010 season.
Tongaat Hulett Zimbabwe has capacity to produce 3,4 million tonnes of sugar per year.
Triangle and Hippo Valley Estates sugar mills have a combined installed milling capacity to crush in excess of 4,8 million tonnes of cane annually and produce over 600 000 tonnes of sugar. Refining capacity is 150 000 tonnes per annum.
The company supports 670 farmers that have a potential of generating $50 million in revenues every year. The company said if it assisted 600 farmers on 12 700 hectares of land they could produce 1,4 million tonnes of sugar cane per annum.
