Cottco scoffs at takeover plans

Cottco scoffs at takeover plans
Published: 30 May 2018
Cotton Company of Zimbabwe (Cottco) managing director Mr Pious Manamike has scoffed at Surface Wilmar's proposal to take over 50 percent shareholding in the company, saying the partnership will not add value given its shallow background in cotton production.

Mr Manamike was responding to the Lands, Agriculture and Resettlement Parliamentary Committee on the Government's cotton funding scheme and the Surface Wilmar proposal.

Last week, Surface Wilmar appeared before the same committee where it revealed plans to take over 50 percent shareholding in Cottco and management control.

It also said it was looking at investing $100 million in the cotton sector over the next five years.

Government, which has been financing cotton production, has invested about $130 million over the past three years, helping the resuscitation of the industry that recorded the lowest output of 28 000 tonnes in more than two decades in 2015.

Production increased to 74 000 tonnes last year.

It is expected to further rise to 100 000 tonnes this year.

Asked by committee chairperson Justice Mayor Wadyajena on whether the company was prepared to partner with Surface Wilmar, a cooking oil company, Mr Manamike said: "As Cottco we believe if we are to join hands we need someone who can add value, but we do not want someone who wants to rediscover what we already have.

"We feel Surface Wilmar may not add value to Cottco because they do not have experience in cotton production.

"They are good at cooking oil processing and we have never seen where they produced cotton. Surface Wilmar is one of our customers. They buy ginned seed from us. Last season we had an order which depended on the expected volumes, but because the season was bad we gave them according to what we had produced and they paid for what we supplied," he said.

Mr Manamike said it was unfortunate that Surface Wilmar had accused Cottco of mismanagement when the company was doing all it could to boost cotton production.

"It is unfortunate that our performance as individuals is being judged by a third party who may not know of what we are supposed to do and the objectives set by our principals.

"I need to put it on record that our principals are aware of our performance since we took over the Presidential Inputs Scheme. For the record, the first year of Presidential Inputs Scheme done through GMB and Agritex was a drought year and the national crop was 28 000 tonnes; then the second year we then took over management of Cottco and we had excessive rains due to climate change and it is on record that the crop increased from 28 000 tonnes to 74 000 and as Cottco we also managed to grow our own intake from 10 800 tonnes to 54 000 tonnes," he said.

Mr Manamike said Zimbabwe was affected by climate change the same way other neighbouring countries such as Zambia, Mozambique and Malawi which have also realised depressed volumes of cotton due to the extreme weather conditions.

He said besides climate change, the company was also facing challenges as some farmers were diverting inputs meant for cotton to food crops.

"We discovered that most farmers had planted an average of 0,62 hectare instead of a full hectare.

"Our teams looked at the plant population per hectare. On average, the plant population was around 22 000 plants and the optimum should be about 33 000 plants per hectare," he said.
- the herald
Tags: Cottco,


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