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Kuda Bwititi, Harare Bureau
THE Government has injected $70 million into Silo Food Industries, while an additional US$55 million and $40 million will be invested over a three-year period in order to help it supply affordable basic commodities to the local market.
President Emmerson Mnangagwa recently indicated Government’s intention to improve the availability and affordability of basic commodities through the entity. Silo Foods began operating as a fully fledged commercial business unit on 1 April this year after the Grain Marketing Board (GMB) was unbundled into two units, which also include a Strategic Grain Reserve.
The restructuring is part of Government’s reform of State-owned enterprises. Silo Foods managing director Mr Daniel Maregedze told our Harare Bureau that the fresh capital injection would enable it to expand its operations “in a big way”.
“The Government has invested about $70 million in the company. This is fresh capital injection, which will enable us to scale up our operations immediately. We have already been on the market, but now we are expanding our operations in a big way. On top of that, Treasury is finalising another package for capital equipment, estimated at US$55 million and $40 million over a three-year period. We started operating as a separate entity on 1 April. We are currently recruiting for key positions in order to capacitate the team to deliver on our mandate,” he said.
The company plans to use all 87 GMB depots as a conduit to distribute its products. Wholesale and retail outlets that already stock the company’s brands will also be used. It is envisaged that the refocused entity will become an arbiter in the market by providing affordable basic commodities that would compete with retailers, most of who are accused of extortionately and speculatively pricing their products. With the new cash resources, Silo Foods, which is in the process of re-inventing itself as a major player in the agro-processing sector, is now ramping up production.
“We have production facilities in four locations so far: Belmont, Cleveland, Mutare and Norton Stock Feeds. We will be selling in every GMB depot (there are 87 of them). We have already set up 25 other Country Feeds shops around Zimbabwe. It is our stated intention to rapidly scale up on our production facilities,” said Mr Maregedze.
Silo Foods, which has three business units — stock feeds, milling and prepacks as well as farming — is involved in the whole value chain. The retailing function is mainly carried out through Country Feeds.
Mr Maregedze said the company didn’t have the appetite to profiteer and would ensure that it only makes “enough profit to keep the business going”.
As part of the ongoing expansion drive, the firm’s workforce will be increased from 50 permanent workers to 400 as new production facilities will be opened. There are also plans to increase Silo Foods’ share of the mealie-meal market from 15 percent to 25 percent by year-end.
Speaking at the 39th Independence Day celebrations, President Mnangagwa said Silo Foods would provide relief to consumers.
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