16 January 2013

Zimbabwe: Millers Send Out SOS for Blue Ribbon

THE Grain Millers' Association of Zimbabwe has urged authorities and financial institutions to ensure that normal operations resume at the country's second largest milling company, Blue Ribbon Industries, to ensure food security.

In a statement, GMAZ chairman Mr Tafadzwa Musarara said if the heavily indebted BRI cannot be rescued, experienced indigenous entrepreneurs should be allowed to take over the company which is under provisional judicial management.

Mr Musarara said the resumption of normal operations at BRI will also benefit hundreds of workers who face an uncertain future should the company be liquidated.

"The Grain Millers' Association of Zimbabwe is following closely the developments unfolding at one of the company's biggest milling concerns, Blue Ribbon Industries.

"The importance of this company in terms of national food security cannot be overemphasised. Despite being encumbered with huge debt, the entity can be salvaged and it presents a fertile opportunity for keen and able indigenous entrepreneurs to take over.

"We appeal to banks, especially indigenous banks, to assist in the resumption of business at BRI in order to enhance basic goods availability and price stability," said Mr Musarara.

BRI has been facing operational challenges over the past few years and has a net liability position of nearly US$5 million following heavy losses recorded over the past four years.

Sources in the company said BRI's average breakeven capacity utilisation is around 48 percent but the current utilised capacity is around 11 percent, resulting in the company recording a US$6,5 million loss last year.

BRI is the holding company of a group that includes Blue Ribbon Foods Limited, Nutresco Foods (Private) Limited and baking subsidiary JA Mitchell (Pvt) Ltd which produces bread, biscuits and other confectionery.

Blue Ribbon Foods is a milling and stockfeeds manufacturing arm of BRI whose popular brands include Ngwerewere and Chibataura mealie-meal while Nutresco's main line of business is the production of food items that include peanut butter, corn soya blend, soya chunks, soups and the traditional drink, mahewu.

Mr Musarara said if BRI was left to face liquidation, it would take the country a long time to establish a company to operate on the same scale.

On September 5 last year, the High Court issued a provisional order placing BRI under judicial management with Mr Reggie Saruchera of Grant Thorton Camelsa Chartered Accountants being appointed the provisional judicial manager.

Mr Musarara said GMAZ would lobby the Ministry of Youth Development, Indigenisation and Empowerment for assistance in reviving the company which currently employs around 300 full-time workers.

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