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Surface Wilmar in US$50m Olivine revival plan

by Mukunda Chitova
01 Apr 2022 at 08:15hrs | Views
THE country's biggest cooking oil manufacturer, Surface Wilmar has put in place a revival plan for Olivine Industries, which will result in a US$50 million upgrade of the Willowvale plant in Harare.

Olivine shut down its Willowvale cooking oil plant in 2017 due to operational inefficiencies which had resulted in high production costs.

The Willowvale factory used to produce cooking oil and had a refinery and silos for maize and soyabeans storage.

Speaking to a Rwandan delegation during a company tour organised by ZimTrade on Wednesday, Surface Wilmar executive chairman and Olivine Industries country head Narottam Somani said the upgrade at the plant was set to be completed by 2025.

"We have invested US$24 million right now (in the Birmingham site).  We have a forex requirement of US$16 million. By doing this expansion, we have an annual export potential of US$100 million to all African countries. There is another site which is the Willowvale site which we are developing. The target completion date is 2025," he said.

The company is targeting to invest about US$50 million in the plant. It targets maize and wheat milling as well as production of pasta, stockfeed and biscuits.

Somani, however, said activity at the Willowvale plant would depend on currency stability and support from the government.

The company exports some of its products to Zambia, Malawi, Mozambique, South Africa and Japan.

"Export income is something like 15% of the total (revenue) but it can go up. It all depends on the availability of foreign currency. Government has supported us, there is no doubt but there are limitations," he said.

He revealed that Surface Wilmar was operating at about 15%  capacity due to foreign currency shortages, but the business remains profitable due to its efficient use of resources.

Somani said they had contributed to the Zimbabwean economy through creation of over 800 jobs, forex savings through import substitution, providing a market for agricultural produce, thereby stimulating agricultural growth and creating significant value chain linkages with farmers, transporters and retail chains. He said it also contributed through reduction of import bills by localisation of value addition processes of agricultural produce, exports to regional markets to generate forex for the country as well as training local people  on the latest state-of-the-art technology.

Government is the single largest shareholder with 35% shareholding in Olivine. External shareholders collectively hold the balance.

Somani said through external shareholders' corporate guarantees and loans, the company raised capital for investment in new plants and working capital.

He said strategic State-owned business units like Olivine, in which the government is a shareholder, deserved special support to stabilise markets and prices.

Surface Wilmar is 90% owned by SR Amando, an investment vehicle which includes the Somani family and Wilmar International. Industrial Development Corporation Zimbabwe owns 10% of the company.

Source - Newsday Zimbabwe