Wilmar International has approached Government for a $7,6 million bailout to recapitalise Olivine Industries through an equity deal. The Singapore-based shareholder last year completed the 49 percent takeover of Olivine Industries and has been expected to inject $32 million into Zimbabwe’s largest cooking oil manufacturing company.
Olivine Industries executive chairman Mr Narottam Somani told The Herald Business yesterday that a recapitalisation plan for the company was in place.
“As a shareholder in Olivine we made a proposal to the Government on December 17, 2015 for $7,6 million recapitalisation in exchange for equity.”
The Asian diversified group has a significant shareholding in Surface Investments and the acquisition of Olivine has created the biggest cooking oil manufacturing conglomerate in the country.
Other efforts to boost operations at the company include the setting up of a new soap manufacturing plant which will have capacity to produce two tonnes of soap per hour.
“We analysed the soap business and saw that there is need to put up a new line. An order for the equipment has already been made with delivery expected in March this year. The plant is due to be commissioned in June this year.”
The company had also shut down its Buttercup manufacturing plant which had outdated and obsolete machinery.
“We were losing production on the Buttercup plant considering that some of the equipment was installed in 1947 and some in 1965. So generally it is difficult to compete in this automated environment with such outdated equipment.
“We understand the appeal of the Buttercup brand on the local market and the region but our aim is to come up with a perfect product which is cost effective,” said Mr Somani.
At present, Olivine is operating at about 30 percent capacity.