Tanzania firm eyes Zimglass

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A TANZANIAN firm has shown interest in Zimbabwe’s sole manufacturer of glass packaging, Zimbabwe Glass Industries (Zimglass) and will dispatch a team by the end of the month to tour the plant.

By Business Reporter

According to a report presented to the Parliamentary Portfolio Committee on Industry and Commerce recently, AfrAsia Bank was appointed financial advisor in 2012 to look for a solution on how the firm would be recapitalised.

“Interest to invest in the company has been shown by a Tanzanian investor called Kioo Limited.

“A meeting and tour of the company has been planned for the end of February 2014 by the potential investor after which they should be able to make a decision,” Industrial Development Corporation of Zimbabwe said in the report.

“A number of glass companies worldwide have been contacted to invest into Zimglass by AfrAsia Bank,” the report added.

A revaluation of Zimglass and review of business models was done by AfrAsia Bank.

The coming on board of a potential investor would result in the dilution of the IDCZ shareholding.

IDCZ, which is a government entity, wholly owns Zimglass.

Zimglass produces 2 100 tonnes of flint glass per month and its main customer is beverages maker, Delta Corporation.

However, Zimglass’ market is under threat from the use of convenient packs such as PET by Delta thereby affecting the uptake of flint glass on the local market.

The dilution of IDCZ’s interest in Zimglass is part the corporation’s move to restructure its operations in the absence of government support.

IDCZ acknowledged that the current model of a holding and management services corporate was at the expense of new project development, rescue of distressed industries and development finance and capacity building roles.

The State enterprise said it required an injection of $37 million to clean up its balance sheet to enable it to borrow or attract foreign direct investments.

It said its profit generation capacity was insufficient to cover debt service on short term debt and to refurbish its plant and equipment or sweat its assets, most of which were old and obsolete.