Published: 30 October 2013

Talks between the Industrial Development Corporation (IDC) and a potential investor that it was courting to recapitalise its fast moving consumer goods (FMCG) manufacturing subsidiary Olivine Industries have collapsed, a senior official said Tuesday.

The state-owned IDC announced last year that it was in negotiations with an unnamed partner to inject fresh capital into Olivine.

The IDC and AICO Africa Limited jointly own Olivine Industries with 51 percent and 49 percent stakes respectively.

IDC group general manager Mr Mike Ndudzo told New Ziana the investment deal had fallen through.

He said the investor had been put off by a number of issues including the negative perception surrounding the business environment in the country. "The investor we thought was coming through has withdrawn and we are looking at plan B," he said.

"A lot of things caused the deal to collapse for example their perception of country risk, the recent fall in the production of cotton seed and the reinvestment requirements because there is quite a heavy reinvestment requirement of $32 million."

Mr Ndudzo said the IDC was now putting into action new strategies to lure other investors.

"We have to do something. When one plan fails we do not collapse. We have to move to plan B. It might not be the ideal one but we have to survive on that one.

"It might mean also a streamlined operation. It might mean our own rationalization within the group and so forth but that is a plan B," he said.


- New Ziana

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