Govt averts National Foods closure

Govt averts National Foods closure
Published: 07 December 2018
INDUSTRY minister Mangaliso Ndhlovu says the flour milling arm of National Foods will not close shop after government addressed the concerns brought by the company, which had warned of imminent closure.

Ndhlovu would not disclose the details of the arrangement, saying the matter was highly sensitive.

National Foods chief executive Michael Lashbrook was not immediately available for comment.

"What I can say about National Foods is that we had discussions last (Tuesday) night with them and the Reserve Bank of Zimbabwe, and the issues that they had raised were all resolved and the agreement was that they will not be closing as they had indicated," Ndhlovu said.

"We are very optimistic about the economic outlook and the period leading to ZITF (Zimbabwe International Trade Fair). I want to believe the measures that government is putting in place are aimed at fiscal consolidation and addressing the challenges that we are facing throughout, leading to October. We have decided as government that we will not perpetuate a situation that leaves us disadvantaged as an economy.''

In a widely publicised letter to stakeholders, Lashbrook said the company was contemplating shutting down its mills in Harare and Bulawayo on December 5.

"Due to the delays in repatriating payments to our foreign wheat suppliers, our suppliers have today instructed National Foods to immediately cease draw-down of wheat stocks," part of the letter read.

Zimbabwe is grappling with a severe shortage of foreign currency which intensified in recent months, leading to disruptions in the supply of fuel, drugs and other imported goods.

Ndhlovu said government was working on measures to deal with the anticipated increase in demand towards the festive season.

"Most companies currently have challenges with foreign currency, and we as government are doing everything we can to assist. I want also to assure the nation that we are working closely with these companies, we have measures in place to make sure that they don't close. We have a draw-down from Afreximbank and that has been activated, and the disbursements are currently in place. So, for foreign currency allocations, we expect most of the companies to be able to provide to the market," Ndhlovu said.
The company is the country's largest miller.

Innscor Africa is the largest shareholder in the company with a 37,7% stake. South Africa's Tiger Brands controls 37,4%, while National Foods Workers' Trust holds 9,85% shareholding.
- newsday
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