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Harare Bureau
THE Industrial Development Corporation has asked its financial advisors to evaluate bids for potential fresh capital investment in Olivine Industries.
General manager Mike Ndudzo said the financial advisors would assess the bids on the basis of price, strategic intent and proof of funds.

He would, however, not disclose the suitors neither would he provide details on how many investors were looking to acquire equity in the oil processor.

“The Board of Olivine has asked its financial advisors to evaluate all competing bids in terms of price, strategic intent and proof of funds and make recommendations to the board and shareholders by October 31,” he said.

“Our intention is to strengthen the supply chains for beneficiation and value addition in the oil-seed expression by rationalising Surface Investments and Olivine Industries,” Ndudzo said in reply to e-mailed enquiries.

Olivine has suffered from the high cost of finance and the liquidity crisis and frequent machine breakdowns as its equipment has outlived its lifespan.

The Industrial Development Corporation is set to assume total control of its 51 percent owned subsidiary, Olivine Industries, after accepting an offer for the remaining 49 percent stake from co-shareholder, Cottco.

Ndudzo early this year, said that Olivine will be merged with one of IDC’s associates, Surface Investments. Surface is a partnership with Indian investors.

Ndudzo said the State owned conglomerate has identified prospective investors willing to inject a huge amount of money into oil production and discussions were ongoing on the terms of the investment.

Earlier attempts to secure investors to inject fresh capital into Olivine had failed with a total of 78 potential buyers having been shortlisted, but virtually all of them eventually deciding against investing in the company.

Ndudzo said the investors, despite willing to invest, had expressed reservations about the size of the market as well as the implications of the country’s equity. IDC is now actively working on resolving the concerns.

IDC has engaged with the Ministry of Youth Development, Indigenisation and Empowerment and the Ministry of Finance to secure assurance and incentives to ensure the investment materialises.

The investment will result in significant capital injection that will see the partners contracting commercial and out grower farmers for the raw material required in the manufacturing processes for the merged IDC entities.

Ndudzo also said that the corporation had since approached the Agricultural and Rural Development Authority for underutilised farms, which the industrial giant could use for production of oil production inputs.

Olivine, which manufactures a range of fast moving consumer goods such as oil, soaps, margarine and beans, had closed its oil expression business unit as production had become uncompetitive due to old equipment.

Olivine requires $25 million to recapitalise operations. The company was formed in 1970, initially focusing on oilseed milling and refining, but later added margarine and spreads, beauty and laundry soaps, candles, baking fats and pasties in its product range among other products.