IDC to dispose of Zim Grain Bag stake

financial problems.
But efforts by IDC to rejuvenate the company’s fortunes have been hampered by the State enterprise’s failure to raise fresh capital.
“IDC will soon dispose of the firm because they have not been able to raise funding to recapitalise Zimbabwe Grain Bag,” said the source.
IDC spokesman Mr Derek Sibanda said he was not aware of plans to sell the Bulawayo based manufacturer of industrial packaging.
But Mr Sibanda said the minister, as a proxy of the shareholder, was more privy to Government’s plans on the Bulawayo firm than he was.
“We are not aware of any plans to sell Zimbabwe Grain Bag. But we need to clarify with the minister who might have the finer details regarding the plans to dispose of Zimbabwe Grain Bag,” he said.
Industry and Commerce Minister Welshman Ncube recently hinted that the IDC would dispose of its shareholding in Zimbabwe Grain Bag.
Sources said the Ministry of Industry and Commerce was wondering why IDC was not doing exactly what its mandate states. Ordinarily, IDC would divest from a troubled company once it had helped it to stabilise.
The State enterprise’s mandate is to help in the Industrialisation of the country by preventing the collapse of financially troubled businesses.
It was also established to invest in risky Greenfield projects into which investors would not venture except when it starts running viably.
But once the project starts running smoothly, IDC would normally be expected to divest and focus on other troubled areas.
A memorandum on the proposal to divest 49 percent of the State enterprise’s shareholding in Zimbabwe Grain Bag by the Minister of Industry and Commerce was approval by the Working Party of Officials of Inter-ministerial Cabinet Committee on Privatisation of parastatals before presentation to the IMCCPP.
Once approved by the IMCCPP, the recommendations would be made to the Cabinet, after which IDC would look for investors interested in the firm.
Parastatals and State Enterprises Minister Gorden Moyo said Zimbabwe Grain Bag was now out of IDC’s focus as it was a mature industry but lacked working capital to increase capacity utilisation.
Zimbabwe Grain Bag was formed in 1986 as a joint venture between the Treger Group of Companies and the Industrial Development Corporation.
The primary objective was to satisfy the country’s annual demand for grain bags, which until then were being wholly imported.
The Grain Marketing Board was the sole distributor of the grain bags. The firm has grown over the years and diversified its product range to meet changing market requirements across the country.
The company covers agriculture, mining, industrial and export sectors of the economy. Its product range includes bags for grain, fertiliser, cement, stock feed, maize meal, minerals, sugar, fresh produce, woven cloth and bulk bags.