IDC to dispose of nine units

Published: 21 January 2014

THE Industrial Development Corporation plans to dispose of its shareholding in nine subsidiaries and associate companies as part of the company's three pronged strategy to reduce, sell-off and entrench its positions.

This comes at a time the company requires significant fresh capital to recapitalise its operations, but raising the funds has been challenging due to the tight liquidity situation that is pervading the domestic economy.

Notably, the feeling in some quarters has been that in line with its mandate, IDC should invest for a given period after which it should sell to recoup its investment and target new initiatives or support other key areas.

The argument is also based on the view that IDC could raise part of the funding it requires by selling some of its non-strategic, non-profit making and struggling entities to raise funding to support other key initiatives.

To that end, the conglomerate said it will strategise to retain relevance after emergence of other entities that have taken over part of its mandate in areas such as mining, tourism and infrastructure development.

IDC general manager Mr Mike Ndudzo said the company would sell its interests in Stone Holdings, Amtec, Deven, G and W, Almin Metal Industries, Surface Investments, National Fertiliser Industries, Zim Copper and Zimbabwe Grain Bag to suitors who will inject fresh capital.

Mr Ndudzo pointed out that large investments comprising Chemplex Corporation, Zim Glass, Olivine Industries and Willowvale Mazda Motor Industries need refurbishment capital and have been earmarked for dilution.

"Smaller to medium size up and running investments earmarked for disposal are not owned 100 percent in all cases and require extensive negotiations with partners and new investors but are not of material value," he said.

The third category is made up of property developer Sunway City, Detema Ceramics, Lupane Gas Company, which the State owned industrial development company has short-listed for further development.

Challenges characterising access to funding and or capital means scarce resources have to be concentrated in supporting ventures of strategic importance to the economy by stream lining the portfolio structure.

In that regard, Mr Ndudzo said the industrial company was seeking ways to assist struggling companies that are of strategic importance to the economy and these include Caps Holdings, Olivine, Zimphos, Zimglass and companies in the paper, motor, textile and leather industries.

Mr Ndudzo said IDC's tenure in any investment depends on circumstances of each as some were rescue cases, bilateral joint ventures while others were spring boards for future investment and growth.

While some are not necessarily profitable or commercial, they are key anchors for industry, hence IDC's continued presence in such initiatives.

Mr Ndudzo said IDC is presently pursuing a number of endowment based value addition initiatives such as batteries from lithium, catalytic converters from platinum, stitched drilling tools and wire from industrial diamonds, fertiliser and coal bed methane among others.

Already, IDC has partnerships with Japan in motor industry, China in cement, South African in extrusions, Malaysia in real estate, India and Singapore in food processing.
- herald

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