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Minister Bimha

Harare Bureau
Food and beverages manufacturer, Cairns Foods needs a capital injection of about $8 million for the purchase of new machinery and refurbishments in order to boost its capacity utilisation by about 40 percent, the company’s judicial manager Reggie Saruchera said. Saruchera said this on the sidelines of the commissioning of the company’s new drying and packing plants in Harare last week courtesy of a $1 million loan under the Distressed Industries and Marginalised Areas Fund.

The machinery procured from China cost about half-a-million dollars while the remainder went towards other operational needs to boost production capacity.

“The drying and packing plants were procured from China using the Dimaf funds while the remainder of the funds were utilised to eliminate bottlenecks in other operations such as water bottling, jam and baked beans canning and chocolate processing, with a small portion going towards working capital,” he said.

Saruchera said once a new investor comes on board and injects fresh capital $7 million would go towards the purchasing of new equipment while US$1 million would go towards refurbishments.

Capacity utilisation which was at seven percent when the company was placed under judicial management in November 2012 has since improved to 35 percent while it is targeted to further go up to between 70 percent and 80 percent after re-capitalisation.

Industry and Commerce Minister Mike Bimha who was guest of honour at the commissioning ceremony commended the judicial and Cairns management team for their efforts towards rescuing the company from total collapse.

“The commissioning of this machinery is a demonstration of the good work done by the judicial management and Cairns to stir the company from a difficult position a few years ago.

“We have been hearing much about company closures of late and rarely do we hear about companies re-opening. The more we raise capacity utilisation in the local industry the more we would improve our competitiveness compared to imports from other countries,” he said.

Saruchera said to date the company’s staff complement of almost 700 employees are now back at work. Prior to judicial management, the company were battling huge operational challenges including an US$11 million debt burden while efforts to raise some US$20 million in new capital largely failed.

Following its placement under judicial management, the company announced the need to retire its debt and to replace obsolete equipment.

It was also reported that it owes suppliers about $3 million and $15 million to banks and considerable amounts to the Zimbabwe Revenue Authority and its employees.

The judicial manager eventually proposed that the company looks for potential investors to acquire a stake in the company.