Maravi

(HERALD) Bid to stifle indigenisation

Bid to stifle indigenisation
By Fanuel Kangondo and Martin Kadzere

INFANT milk and cereals producer, Nestle Zimbabwe has once again come under the spotlight with the company making frantic efforts to avoid indigenisation.

In an apparent effort to skirt the indigenisation process aimed at ensuring that Zimbabweans own 51 percent of the foreign-owned firms, Nestle Zimbabwe has written to Industry and Commerce Minister Professor Welshman Ncube to help resolve the matter “between us and Government”.

This was after Youth Development, Indigenisation and Empower-ment Minister Saviour Kasukuwere and Nestle Zimbabwe managing director Mr Kumbirai Katsande had met to discuss the company’s indigenisation plan.

Minister Kasukuwere told Herald Business that he failed to understand why Nestle was employing divide and rule tactics by taking the matter to fellow Cabinet Minister Prof Ncube. He said that Mr Katsande should stop being provocative with the hope of turning a Government minister against another.

“There is no doubt that Nestle is a prime candidate for indigenisation, and all we are doing is within the laws of this country. It’s very unfortunate that some black CEOs find themselves as defenders of white capitalist interests,” he said.

After meeting Minister Kasukuwere on Wednesday last week, Mr Katsande was advised to consult the sectoral committee responsible for the manufacturing sector chaired by local businessman Mr Adam Molai. The committee in turn makes recommendations to the minister on matters related to indigenisation.

Milk processing companies fall in the category of sectors that are reserved for locals in the Empowerment Regulations gazetted at the beginning of the year.

After the meeting, Mr Katsande wrote a letter to Prof Ncube saying that Minister Kasukuwere was particularly keen to attend to the indigenisation of Nestle Zimbabwe. As fate would have it, the letter was delivered to Minister Kasukuwere’s office. The Ministry of Industry and Commerce is on the 13th Floor of Mukwati Building while Youth Development, Indignisation and Empowerment Ministry is on the 17th Floor. Excerpts of the letter to Prof Ncube read:

“… The minister expressed his intention to nationalise Nestle Zimbabwe by December 2010, his reason being that the company imposed sanctions. This seems to be in reference to the Gushungo Dairies matter, which we assumed was now behind us. Clearly this is not the case.

“We write to alert you to these developments. You have assisted us resolve matters between us and Government in the past and we feel we require your help.”

Contacted for comment, Mr Katsande denied that he had approached the Ministry of Industry and Commerce on the matter.

“I cannot say much but it is not true that I approached Minister Ncube and anyone within the Ministry of Industry and Com- merce.”

He stated in the letter that Nestle was in the process of implementing an ambitious US$12 million investment in the Equatorial Africa Region that would result in an expansion of commercial milk production in Zimbabwe.

Mr Katsande said that in view of the investment, it did not make business sense to dilute the shareholding interest in Nestle Zimbabwe as it compromised the value of the company. The letter was dated October 7, 2010 and was copied to Mr Pierre Trouilhat, the head of Nestle Equatorial Africa Region and the ministry’s permanent secretary Mrs Shoniwa.

Nestle Zimbabwe suspended operations in the country for two weeks towards the end of last year following a misunderstanding over the supply of milk from Gushungo Dairies. The Switzerland-headquartered food company had bowed to pressure from activists against Zimbabwe’s land reform to stop buying milk from Gushungo Dairies owned by the First Family.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), NESTLE

posted by MrK @ 1:15 AM