27 January 2013

Zimbabwe: Millennium Tobacco Auction Floors in Problems

MILLENNIUM tobacco auction floors (MTF) is in serious debt and has failed to register for this year's marketing season due to operational challenges.

Standardbusiness heard last week that the auctioneer -- that started operations in 2011 -- had not approached the Tobacco Industry and Marketing Board (TIMB) on its plans for the 2013 selling season.

TIMB announced last week that the 2013 tobacco marketing season will open on February 13 while contract tobacco sales would commence the next day.

Only three floors: Boka Tobacco Auction Floors, Tobacco Sales Floor and Premier Tobacco Auction Floors, have been registered to operate this selling season.

TIMB chairperson, Monica Chinamasa said MTF had not registered to operate this season as they were still "sorting out their issues".

"We are still waiting to hear from them. We told them about our minimum standards of operation and they will have to comply if they are to be registered," she said. "However, the absence of one floor will not affect the handling of the golden leaf's volumes this season because one floor alone can handle huge volumes, as up to 60% of the crop constitutes that of contractors."

Minimum requirements for standard operation required by the board of auction floors include construction of proper ablution facilities and waiting rooms for farmers on the premises, among others.

However, MTF was apparently found wanting in this regard.

The floor's founding chief executive officer, Richard Chabata has since left the company to pursue other interests.

MTF operates from Msasa-based Farmers' World Holdings (Pvt) Limited premises, owned by Muzarabani South MP Edward Raradza.

It is understood that last year, the company took a loan from a local bank (name supplied) in order to "assist" the farming community by venturing into contract farming.

The idea was to finance farmers by giving them chemicals and fertilisers with a target of at least 10 million kg under the scheme.

Raradza confirmed that the floor had taken a loan from a local bank but would not say whether or not the money had been repaid.

"Look, that's business. We have made some arrangements with the bank [on a payment plan]. "We are confident that we will be operating this season. We are renovating accommodation for farmers as well as toilet facilities," he said.

Up to 144 million kg of tobacco worth US$525 million went under the hammer in the 2011-2012 marketing season representing a 46% rise from the previous season's US$360 million.

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