Olivine disposes of oil plants

published in newspapers.
“The plant is a complete chain cotton processing plant, starting with ginned cotton seed, down to solvent extraction plant with total processing capacity of 250 000 tonnes of cotton seed.”
The plant sale has come at a time when the company is working on mobilising capital to recapitalise its operations.
The company is set to be unbundled from one of its major shareholders, AICO Africa Limited.
AICO, a conglomerate listed on Zimbabwe Stock Exchange, jointly owns Olivine, the manufacturer of consumer goods, with the Industrial Development Corporation on a 49-51 percent basis respectively.
Olivine, like several other local manufacturing companies, has suffered from high cost of finance, intermittent machine breakdowns, as most of the equipment has outlived its lifespan.
The company also suffers from  critical shortages of utilities such as electricity and water.
This has resulted in most firms operating below their installed production potential.
These factors have added more challenges to the cost profile of locally manufactured goods and have become less competitive when compared with imports, particularly from South Africa and Botswana.
Their goods are produced under an extremely opposite business environment.
Last week, Olivine said it was buckling under pressure from low-priced imported products flooding the market. The producer of leading brands since 1931, the company said it was feeling the heat, especially over cooking oil and baked beans.
H.J. Heinz, the US-based food company giant, sold its 49 percent shareholding to the Cotton Company of Zimbabwe in September 2007 in a deal worth close to US$7 million.
Both Olivine and Cottco later became subsidiaries of the AICO Africa which replaced the listing of Cottco.
With plans in place to unbundle the AICO group, with Olivine and Cottco expected to list as separate entities, the group is working on recapitalising the two firms before they start trading on the ZSE.
Unlike Cottco, Olivine requires huge capital injection before listing. According to AICO, Olivine needs at least US$25 million for recapitalisation.
In 2010, AICO intended to raise US$50 million through rights offer as the group wanted to retire debts of US$40 million and raise funds for Olivine Industries. The cash call, the biggest on the ZSE in post-Zimbabwean dollar era was however, blocked by some shareholders.
During the last financial year, Olivine made a loss of about US$12 million. AICO said it expected to reduce the loss to US$4 million by the end of next year.