Tuesday, November 17, 2009

(HERALD) CBZ seals fertilizer, maize seed deal

CBZ seals fertilizer, maize seed deal
Business Reporter

CBZ Bank Limited has struck a multi-million dollar deal with the Zimbabwe Fertilizer Company, Windmill and Seed Co for the production and supply of fertilizer and maize seed to the Grain Marketing Board.

The chairman of the Parliamentary Portfolio Committee on Industry and Commerce Mr William Mutomba told Herald Business that CBZ Bank has pledged to fund production of 25 000 tonnes of fertilizer by ZFC and Windmill and 4 000 tonnes of seed maize by Seed Co.

ZFC and Windmill would shortly supply 12 500 tonnes of Ammonium Nitrate as well as 12 500 tonnes of Compound D to GMB.

The fertilizer and maize seed to be supplied to GMB would exclude what the firms had been producing and supplying to the market.

The firms have been struggling to produce enough farming inputs to meet demand ahead of the summer cropping season due to lack of lines of credit worsened by liquidity problems in the economy.

However, Mr Mutomba said the three companies assured the Parliamentary Committee on Industry and Commerce that after the cash injection from CBZ Bank they would briefly raise capacity to optimal levels. The value of the deal could however not be established yesterday.

The committee visited the companies last week on concerns about the proliferation of fake fertilizer on the market and prohibitive prices of maize seed.

Fears were that the prevailing situation regarding price and availability of inputs could affect preparations for the next agricultural season.

"As you know, industry is the brain child of agriculture and reports were that nothing is happening at these companies, which support agriculture. Some of the said issues are however now historical, but others like liquidity still remain," said Mr Mutomba.

Following the deal with CBZ the three companies — ZFC, Windmill and Seed Co would supply the agreed quantities of fertilizer and seed maize to the Grain Marketing Board in the next three weeks.

Concerns about maize seed followed reports that farmers were falling victim to syndicates involving even big companies that sold fake maize seed, branded and packaged as the real product.

Police recently impounded over six tonnes of fake maize seed in Harare, which has since been linked to some big companies.

Companies that produce key farming inputs have reportedly indicated that they were facing problems accessing lines of credit from local banks to finance their working capital requirements.

Local banks have, since the advent of the multicurrency system, been stringent in terms of lending to agriculture and industry.

This has been largely due to the tight liquidity crunch rocking the entire economy, which has been worsened by the global financial recession, which severely hit developed economies.

Labels: , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home