Surface Wilmar offers to inject $100m into Cottco

CHITUNGWIZA edible oil processor, Surface Wilmar has tabled a proposal to take over management of Cottco in order to boost production of the crop in the country, so that they could extract cooking oil from cotton.

BY VENERANDA LANGA

Early this week, the company’s chief executive officer Sylvester Mangani, chairperson Narottam Somani and director Peter Magara appeared before the Justice Mayor Wadyajena-led Parliamentary Portfolio Committee on Agriculture, where they revealed they were willing to inject $100 million to support farmers growing cotton with inputs like fertiliser, seed and insect sprays.

Mangani said the company wanted a 50% stake in Cottco, with government taking the remaining shareholding.

“However, we will take over control of Cottco’s management 100% in order to ensure cotton production in the country increases as we manufacture cooking oil from cotton seed and so we are interested in increasing cotton production,” he said.

Mangani said the production of cotton crop had drastically declined, with 350 000 tonnes of cotton achieved in 2001, yet to date only 10% of that quantity was being produced.

“This is of concern to us because our company is in oil production and we have an interest in the amount of cotton crop produced because we derive oil and seed from cotton and if the cotton sector is dying then our business will die, because for the past three years government-funded Cottco, which we thought was going to waste because there was no increase in production and so we took it that we should run Cottco to increase production,” Mangani said.

Somani added: “In 2015, we were given an opportunity to take over Olivine which was struggling and Wilmar, which is one of our shareholders has an asset base of $40 billion and after we produced Buttercup margarine and Jade soap at Olivine, they started making profits. Olivine is owned 35% by the Ministry of Finance and 65% by Surface Wilmar. The cotton industry started diminishing although the Reserve Bank of Zimbabwe provided inputs to farmers and we have been producing 10 000 tonnes per year when we have the capacity to produce more than 200 000 tonnes per year.”

He said once Cottco is revived, the country will have 150 000 to 200 000 tonnes of seed and this will supply a third of the country’s oil requirements because cotton is about 18% oil and if extracted from 200 000 tonnes this would provide 360 000 litres of oil, when the country only needs 100 000 litres of oil per year.
Their plan says before taking over Cottco they will do due diligence, and if the company is indebted, they will propose that it be taken over by the Zimbabwe Asset Management Company.

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