ZIMBABWE Stock Exchange-listed seed manufacturer Seed Co, expects government to pay off its $18 million debt now that elections are over as high interest charges are now affecting the company, an official from the company has said.
Report by Victoria Mtomba
The money includes $5,6 million owed by government, while the rest is owed through quasi-government institutions.
Seed Co manufactures a wide range of seeds to include maize , cotton, soyabean, among others.
Speaking on the sidelines of the company’s annual general meeting last Thursday, Seed Co chief executive officer Morgan Nzwere said the seed company had not received payment from government in the period ending March 2013.
“Interest from bank loans becomes a big problem,” he said.
He, however, could not provide more information as the company was still in the first quarter of its financial period.
Nzwere said debt-collection would be the company’s key priority area going forward.
“Since last year, we didn’t get paid. Now that the elections are over, we hope to get paid as all the resources were channelled towards elections,” he said.
“We hope a substantive government will be put in place so that we know where to go,” Nzwere said.
The company is also owed $4 million by the Zambian government.
“Debt collection in Zimbabwe was expected to gather momentum after elections. In Zambia, the government there is paying slowly, while in Malawi, all amounts due have been paid,” he said.
Nzwere said in the first quarter of this year, maize seed sales were still marginal and business was revolving around tobacco and cotton seed sale proceeds.
“In Zimbabwe, post-elections enquiries have already started. There is still a huge mismatch between supply and demand of maize seed, with projections of between 800 000 and 900 000 tonnes against national requirements, historically around 2,1 million,” he said.
He said the company was awarded a tender to supply 1 800 tonnes of cotton seed to Malawi, although the demand for seed is expected to remain subdued due to the negative impact of the protracted slump in world prices.
Nzwere said the company received tenders from Rwanda, Botswana and DRC for maize and soyabean seed, at the same time securing new markets in Ethiopia and Nigeria through partnerships.
“We hope the new markets in Nigeria and Ethiopia will break even by 2016 as they are constituted by small-scale production. Potential revenue growth will be between 10% and 15% in 2016,” Nzwere said.