adminTinashe Makichi Business Reporter
The Competition and Tariff Commission has approved the acquisition of local seed manufacturer Agriseeds by a South African group, ZAAD Investment Limited.
Johannesburg Stock Exchange-listed ZAAD Investment’s seed manufacturing subsidiary Klein Karoo Saad Bemarking wants to acquire an 80 percent stake in Agriseeds.
According to the arrangement, ZAAD will acquire the 80 percent currently owned by Royal Crown Investments Limited. Chagaris (Pvt) Limited owns the remaining 20 percent.
Agriseeds managing director Mr Walter Chigodora yesterday confirmed to The Herald Business that CTC has approved of the transaction.
“I have just received the approval letter from CTC. We are now planning a meeting with the South African company. We also have to engage the Reserve Bank of Zimbabwe and notify them of the development,” said Mr Chigodora.
“We decided to engage a partner who is already doing well in the seed manufacturing sector with the view that only the presence of a strategic investor will leave the company in a solid position.”
Sources say the company agreed on the acquisition because it wanted to avoid possible liquidation.
The acquisition is set to revive the company and will go a long way in addressing the company’s debt at the same time injecting working capital.
In a bid to revive food production Agriseeds, with support from Hivos and SNV, has been embarking on programmes to produce seed that can be sold to other farmers and organisations working in the sector to improve food security.
Hivos and SNV saw the collaboration with a private sector company as a more effective approach to improve the small-holder agriculture as the company offers a ready market to the produce from the farmers.
Agriseeds is an established private company and actor in the Zimbabwean seed production industry. Its core business is seed production and from inception, its focus has been to engage small -holder farmers in producing seed suitable for this sector.
The company has been working with small-holder producers since 1988 and has a wealth of experience in the area of seed production.
Agriseeds’ main activities involve contracting seed producers, both small and large scale, to produce seed mainly for crops grown by small-holder farmers. Farmers get trained to produce certified seed.
They are given inputs on a loan basis and upon harvest they sell the seed to the company, which then deducts the costs of inputs.
In 2009/ 2010 season, Agriseeds worked with 1 000 small-holder seed producers who benefited from funds which were availed by the Netherlands Minister for Development Co-operation.
Online Reporter