COMMENT - This is excellent. (Now for the other 49%.)
Schweppes records 33pc volume growth for 2011
Friday, 02 December 2011 00:00
Fanuel Kangondo Deputy Business Editor
SCHWEPPES Zimbabwe Limited has experienced phenomenal business growth a year after the company's operations were localised in a landmark empowerment deal concluded in May last year.
The company recorded 68 percent growth in 2010 and year-to-date volume growth is 33 percent, board chairman Mr Sternford Moyo has said.
"The business has been growing steadily since localisation with strong growth projections for the future. Our 2010 volume growth was 68 percent versus 2009 and 2011 year-to-date volume growth is 33 percent versus 2010," he said.
"We recorded the highest sales volume in 2010 in the history of the organisation. I believe this is a result of an improved economic environment and a focused empowered workforce."
Under the empowerment scheme, Schweppes workers now own 31 percent of the company, management 20 percent and Delta Beverages the balance of 49 percent.
To boost the business, Schweppes is undertaking a US$14,5 million plant capacity upgrade that will see the manufacturer of non-carbonated drinks expand its beverage offerings.
The company will now be able to produce new juice containing products under the Minute Maid brand that is ranked the fifth largest of the Coca-Cola Company's global beverage portfolio in terms of volume.
Mr Moyo said the transformation into a juice business would support the citrus production in Zimbabwe to facilitate 100 percent local procurement targets and thereby enhancing economic development.
He said the broad-based economic empowerment programme, as a whole, was anchored on the fight against poverty and to uplift communities countrywide.
Mr Moyo said there was increasing realisation that investors should balance their needs with those of the communities in which they operate.
"While it is desirable that investors have to maintain confidence in the country, they must also balance the needs of the locals," he said.
Speaking at the launch of the Schweppes Employee Empowerment Scheme, President Mugabe said human rights should not be viewed as a one-sided affair but both parties should work together to achieve a desirable scenario. He said it was a futile exercise if the investors kept on hammering on the issue of human rights when they chose to ignore the historical background surrounding the ownership of the companies and mines which the country seeks to address.
Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere said the Employee Share Ownership Scheme had brought a new status to workers in Zimbabwe.
"It moves the worker away from a distant, subservient and suspicious disposition, lending him or her a new status through proud ownership and participation in the affairs of the business. Ownership comes with responsibility," he said.
"Perhaps, even talk of reckless industrial action will become a thing of the past as all participating shareholders will share the burden of running the business."
Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), RETAIL, SAVIOUR KASUKUWERE
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OK sees strong earnings growth
23/11/2011 00:00:00
by Reuters
RETAIL group OK Zimbabwe reported a 1,167 percent jump in first-half earnings, spurred by growing demand as the country's economy continued to recover from a decade-long slump.
OK Zimbabwe's basic earnings per share was 0.38 cents in the six months to end-September, compared to 0.03 cents in the same period last year, financial results released by the company on Wednesday showed.
After-tax profit was $3.9 million in the first half of the year, up from $322,000 registered during the same period of 2010. Revenue grew 61 percent to $185.6 million from $115 million previously.
Zimbabwe's retail sector is one of the fastest growing in an economy that is recovering under a coalition government formed two years ago by President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai.
The economy is expected to grow for the third successive year this year, expanding by 9.3 percent, while inflation has come down to single-digits from a peak of 500 billion percent in December 2008, according to IMF figures
Labels: OK ZIMBABWE, RETAIL
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COMMENT - India is not growing because it has thrown open it's markets to foreign corporations, but by keeping economic activity to itself. It is time Zambia did the same.
Multinationals kept at bay in demanding Indian market
By Amy Kazmin in New Delhi
Published: January 21 2010 02:00
In India, Marks and Spencer has learned that small and easily overlooked details can determine whether sales are made. Take, for example, men's shirts. In the UK, only a third of M&S shirts have pockets. But in sweltering India, where jackets are required only on formal occasions, most men want a pocket on their shirt for handy storage.
For its first eight years in India, M&S, the mainstay of the British high street, paid little heed to this. Operating through an Indian franchisee, Planet Retail, M&S stocked its 16 Indian stores with apparel reflecting UK consumer tastes.
That is now changing, along with M&S's business model for the country. In 2008, M&S ended its franchise deal and took 51 per cent of a joint venture company which it set up with Reliance Retail , part of one of India's largest conglomerates. It has started tailoring its local offerings for Indian tastes - from more brightly coloured men's polo shirts to higher necklines and lower sleeves for women's garments.
"Until you put people on the ground in a country, you are never going to understand it," says Mark Ashman, chief executive of Marks & Spencer Reliance India. "And when you start putting your money in, you start making different decisions. It brings a different clarity, and clout."
Most international retailers would follow that advice - if only they could. India severely restricts foreign investment in retail businesses, frustrating global companies that see vast potential in a market where modern retailing is still in its infancy .
Only about 8 per cent of urban Indian retail spending takes place in the "organised" sector, while in rural areas it's almost none, according to New Delhi-based Technopak Advisors. But spending in modern retail stores has grown 20 per cent a year over the past four years, a pace expected to accelerate.
So far, though, global retailers like Tesco, Walmart and Carrefour have been relegated to the sidelines. India prohibits any foreign direct investment in multi-brand retailing, which is the preserve of Indian players including 12m mom-and-pop shops, retail chains such as Pantaloon's and Shoppers Stop, and conglomerates like Reliance, Bharti Enterprises and Tata with the Reliance Fresh, Easy Day and Star Bazaar stores respectively.
Walmart and Tesco have found a way into the market with wholesale businesses, which can be up to 100 per cent foreign-owned, to supply both mom-and-pop stores and Indian corporate partners while awaiting what they hope will be further opening. "People who see India as a good market are coming in with the expectation that regulation will change," says Raghav Gupta, president of Technopak.
New Delhi permits foreign ownership of single-brand retailing, where all goods sold in a store belong to a single brand. Even then, foreign equity is capped at 51 per cent. That restriction irked Ikea, which last year abandoned efforts to set up shop in India , saying New Delhi had backtracked on pledges to allow 100 per cent foreign ownership.
But M&S, through its joint venture, is aiming for 1m sq ft of retail space across 50 stores in India within the next five years. It is also making fundamental changes to its business.
Most goods sold at M&S in India have been imported, as the retailer usually sources globally. But with Indian duties on imported apparel averaging 40 per cent, Indians complained that they could buy M&S products more cheaply in the UK than at home. That pushed M&S to find more local goods for its Indian stores, the first time it has ever done so. "Local sourcing is a critical part of our strategy to lower prices," says Mr Ashman.
This year, 39 per cent of goods sold at M&S in India were made in India, up from 20 per cent during the franchise days, and the target is 70 per cent. While lowering prices, the shift has also facilitated the modification of western apparel for local tastes.
"If you've got a market you think is going to be really big, it's worth thinking about what the consumer in that market really wants within the parameters of the brand," says Mr Ashman.
But M&S does face constraints. At its Indian stores, food - which accounts for half its global sales - is conspicuously absent. Even if the goods are all of a single brand, New Delhi is not ready to let foreigners sell groceries directly to its citizens.
Labels: FDI, INDIA, NEOLIBERALISM, RETAIL
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OK, Shoprite talks still on
Business Reporter
OK Zimbabwe Limited has indicated that negotiations with South Africa’s largest supermarket chain Shoprite, which were reported to have collapsed two weeks ago, are still ongoing.
In a statement to shareholders last week, following the news of the collapse of the deal, OK Zimbabwe said negotiations are still in progress.
"OK Zimbabwe Limited advises its shareholders that negotiations are still in progress.
"Shareholders are accordingly advised to continue exercising caution and consult their professional advisors in dealing with their shares in the company".
The South African retail giant had said they were pulling out of the R167 million deal to buy stake in OK Zimbabwe citing political reasons.
But insiders say the parties could not agree on the price for the second largest retail group in the country.
Shoprite executive director Brian Weyers had said they were no longer pursuing further investment opportunities in Zimbabwe in the short to medium term citing socio-economic and political uncertainty.
"Due to the current socio-economic and political uncertainty in Zimbabwe, Shoprite has decided not to engage in further investment opportunities in that country," he was quoted as saying.
Shoprite, which posted a 27 percent jump in profit in the year ending June, operates 102 stores in 16 countries outside of South Africa, including a grocery outlet in Bulawayo that was opened in 2005.
Shoprite said in August that it was "considering" buying businesses in Zimbabwe to expand its operations to the rest of the continent.
It has been holding behind-the-scenes negotiations with OK Zimbabwe with the intention of taking over the retailer.
The South African retailer had gone as far as sending its company executives to tour the local retailer’s branches as part of familiarising with its operations.
Whilst Shoprite continues pondering whether to invest in Zimbabwe or not another South African retail group, Pick n’ Pay, is planing to re-invest in TM Supermarkets.
The group is just waiting for a settlement in a shareholder dispute in Kingdom Meikles Ltd (KML).
Pick n’ Pay holds a 25 percent stake in TM Supermarkets, the largest retail chain in Zimbabwe.
Pick n’ Pay is said to be quite anxious to extend their investment in Zimbabwe. They want to rejuvenate the stores, starting with the equipment, but they did not want to go ahead until the KML saga was solved.
Pick n’ Pay chief executive officer Mr Nick Badminton confirmed discussing with Meikles about investing more in TM.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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Copperbelt is yet to see classical developmental structures – Musonda
By Kabanda Chulu
Tue 27 Oct. 2009, 04:00 CAT
PHOENIX Materials Zambia and HBW of South Africa have formed a joint venture to develop the proposed US $ 160 million mixed use development facility comprising a shopping mall, hotel, housing units and convention centre in Kitwe.
Announcing the formation of TGP Properties Limited, Phoenix Materials chairman Phesto Musonda said there was need to put up modern structures that would contribute effectively to the country's economic development. The proposed project would be constructed near Itimpi opposite Chingola Road Cemetery.
In an interview on Sunday, Musonda said the Environmental Council of Zambia (ECZ) had approved the impact assessment and project construction would commence early next year.
“We are developing this project which is themed as the 'Copperbelt City' and it will be a mixed use development facility costing US $ 160 million and will comprise housing units, a 210 room hotel, 134 retail shops, six screen cinema halls and food courts, conference facilities among other structures. In fact this will be the largest single investment on the Copperbelt outside the mining industry,” Musonda said.
“And our contractors shall soon move on site since ECZ has approved our impact assessment report but we are applying to government to give us the Investment Protection and Promotion Agreement (IPPA) because this is a huge investment and funding is already secured.”
He said the project would attract other developmental activities around it that would result in creating employment opportunities.
“In recent years, the Copperbelt region is yet to see classical developmental structures in form of modern structures and this is why we want to develop a 'copperbelt city' with new facilities that will contribute effectively to the economic development of this country and this project will take 30 months to be completed when we begin construction in the first quarter of 2010,” said Musonda.
And ministry of commerce director of industry Siazongo Siakalenge said the government was ready to issue out IPPA licences so long the prospective developers or investors present their proposals on time.
“We are ready and our negotiating team is ready to consider proposals and decision can even be made within seven days,” said Siakalenge.
South Africa-based HBW are also the owners and developers of the Manda Hill shopping mall in Lusaka.
Labels: JOINT VENTURES, PHESTO MUSONDA, REAL ESTATE, RETAIL
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Shoprite puts R167m OK Zimbabwe deal on hold
Business Reporter
SHOPRITE, South Africa’s biggest retail chain, has put on hold a R167 million deal to buy a stake in OK Zimbabwe Limited, a move that has already been described by local analysts as having no effect on economic turnaround efforts.
Executive director Brian Weyers said in a statement that they were no longer pursuing further investment opportunities in Zimbabwe in the short to medium-term sighting socio-economic and political uncertainty.
"Due to the current socio-economic and political uncertainty in Zimbabwe, Shoprite has decided not to engage in further investment opportunities in that country," he said.
But early this month, the company had said Zimbabwe was the place to be.
Analysts yesterday said Zimbabwe was more interested in investments into production as opposed to retail. Presently Zimbabwe boasted of local retail giants such as Spar outlets, Afrofoods, Savemor, TM supermarkets and OK Zimbabwe, among others.
"Zimbabwe has more than enough retail outlets so the economy is not worried about Shoprite’s decision. What we need is real investment in production to anchor the economy," said one commentator.
South African investors have been making inroads into Zimbabwe following the formation of the inclusive Government, which has seen the country starting to regain its image as a preferred investment destination.
Shoprite, which posted a 27 percent jump in profit in the year through June, operates 102 stores in 16 countries outside of South Africa, including a grocery outlet in Bulawayo that was opened in 2000. Shoprite said in August that it was "considering" buying businesses in Zimbabwe to expand its operations to the rest of the continent.
It has been holding behind the scenes negotiations with OK Zimbabwe with the intention of taking over the retailer.
OK Zimbabwe also issued a cautionary statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.
The South African retailer had gone as far as sending its company executives to tour the local retailer’s branches as part of familiarising with its operations.
Renaissance Capital had valued OK Zimbabwe at R334 million. The announcement by Shoprite comes at a time when the company recently announced that "Zimbabwe was a safe investment destination’’.
Its chairman Cristo Wiese had said his company would go ahead with the deal, as their investments would not be at risk.
"We are like good Africans, we are confident a solution (regarding KMAL) will be found and we believe the whole of Southern Africa will enter a new era over the next five to 10 years," Wiese was quoted as saying then.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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Shoprite eyes controlling stake in OK Zim
By Bright Madera
SHOPRITE Holdings Limited, South Africa’s largest grocery chain, is said to have entered into negotiations with OK Zimbabwe to acquire a controlling stake in the Zimbabwe Stock Exchange-listed retail counter, Herald Business has learnt.
The Johannesburg Stock Exchange-listed company first entered Zimbabwe in November 2000 with the opening of a Shoprite outlet in Bulawayo, the only branch in the country.
Details of the deal are still sketchy, but sources close to Herald Business indicated that negotiations were still at preliminary stages.
Shoprite chief executive, Whitey Basson told South African media recently that the retail group was looking at expanding into the region.
Basson was quoted saying that the Shoprite brand was in an excellent position to expand into the African market outside South Africa.
South African investors have been making inroads into Zimbabwe following the restoration of investment confidence ushered by the inclusive Government.
Another South African grocery shop, Mr Price has already established branches in Harare following the rebound of the country’s retail sector.
This week, OK Zimbabwe issued a statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.
"OK Zimbabwe Limited advises its shareholders that the company has entered into negotiations which, if concluded, will have a significant impact on its business," read part of the statement.
Zimbabwe’s economy has started to register positive growth after years of successive negative growth, with indications that it recorded a growth rate of 1,8 percent during the first quarter of this year.
This development has attracted a number of regional and international investors to invest in the fast growing sectors.
With the South African economy reported to have contracted for the third quarter in succession between April and June, the move could be a strategy by South Africans to flight their investment to potential Zimba-bwean operations.
Shoprite Holdings Limited is an investment holdings company that, through its subsidiaries, constitutes a fast moving consumer goods retail operation on the African continent.
In results released this week, Shoprite reported a significant rise in full year profit. Diluted headline earnings per share for the year to end in June jumped 30,9 percent to 390.8 cents in line with its own forecast of a 25-35 percent rise.
Total turnover climbed 24,5 percent to US$7,62 billion from 5,8 billion the previous year.
Its primary business is food retailing to consumers of all income levels.
The Company is organised into two main business segments: supermarkets, including fresh produce and franchise, and furniture, including insurance.
It owns and operates Shoprite, Checkers, Checkers Hyper, Usave, MediRite, OK Furniture, House & Home, Power Express, Hungry Lion, OK Foods, OK Grocer, OK MiniMark, Sentra and Value, and Megasave.
The Shoprite Group currently trades with 1 068 corporate and 275 franchise outlets in 17 countries across Africa, bringing the total number of stores in the group to 1 343.
Shoprite is in Uganda, Zambia, Nigeria, Tanzania, Mozambique, Mauritius, Malawi, Madagascar, Ghana and Angola.
The Shoprite Group started in 1979 with the purchase of a chain of eight supermarkets for R1 million.
The next 30 years were marked by various acquisitions and innovative expansion strategies that brought it to the R48 billion business that Shoprite is today.
OK Zimbabwe de-merged from Delta in September 2001 and has emerged as one of the leading retail supermarket chains in the country.
Labels: OK ZIMBABWE, RETAIL, SHOPRITE
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