Surface Wilmar, the local unit of Singapore giant Wilmar International says it has submitted a proposal to government to acquire 50 percent of the struggling Cotton Company of Zimbabwe (Cottco).
Under the proposal, the firm will takeover management of Cottco and inject $100 million to revive its operations.
"This is a proposal at its elementary stage and the people who have the confidential documents are the President Emmerson Mnangagwa, the Ministry of Agriculture, and the Ministry of Industry," chief executive officer Sylvester Mangani when he appeared before the Parliamentary Portfolio Committee on Agriculture on Tuesday.
Mangani said the company wanted to guarantee supplies for its edible oils operations in the country, noting that the production of cotton had dropped about 90 percent from the peak of 350,000 tonnes achieved in 2001.
"This is of concern to us because our company is in oil production and we have an interest in the amount of cotton crop produced because we derive oil and seed from cotton. And if the cotton sector is dying then our business will die, because for the past three years government has funded Cottco, which we thought was a waste because there was no increase in production. So we think we should run Cottco to increase production," Mangani said.
Surface Wilmar chairperson Narottam Somani told the committee that if allowed to takeover Cottco, they would provide inputs, seed and fertilisers, and insect sprays to farmers, and the cotton produced will be marketed through auction.
"The cotton industry started diminishing although the Reserve Bank of Zimbabwe has provided inputs to farmers and we have been producing 10,000 tonnes per year when we have the capacity to produce more than 200,000 tonnes per year," Somani said.
"Once Cottco is revived, the country will have 150,000 to 200 000 tonnes of seed and this will supply a third of the country's oil requirements because cotton is about 18 percent oil and if extracted from 200,000 tonnes this would provide 360,000 litres of oil, and this country only needs 100,000 litres of oil per year."
Wilmar describes itself as Asia's leading agribusiness group and among the largest listed companies by market capitalisation on the Singapore Stock Exchange, with a market capitalisation of $40 billion.
Somani said the company still has to conduct due diligence on Cottco.
"If there are any debts at Cottco then we propose that they be nested at ZAMCO," Somani said.
Cottco operates six ginneries in Kadoma, Chiredzi, Sanyati, Gokwe, Muzarabani and Chiredzi with combined annual processing capacity of about 130,000 tonnes.
Surface Wilmar has a 65 percent shareholdings in Olivine Industries, with the government holding the rest.