Business
12 - 9 March 2014 - The Observer
The Observer
9 December 2013 10
The Observer - 08 March 2014 -- 12
149 companies apply
for liquidation
NicozDiamond looks to new markets to drive growth
A
T least 149 companies filed for
liquidation at the High Court in
2012, failing to keep up with high
operational costs a local think tank said on
Friday, and more are seen going under in 2013
as economic conditions worsen.
Companies are battling
The Source, HARARE with high financing
costs, with banks charging as much as 20
imbabwe’s largest short-term
percent interest and the Zimbabwe Economic
insu rer, NicozDiamond, expects
Policy Analysis and Research Unit (ZEPARU)
growth in its new Mozambique
said most of those that applied for liquidation
were on the operationsthey could not pay their
basis that and is targeting smallscale businesses locally to drive revenues
debts
after a flatcosts in Zimbabwe are among the
Labour performance in the two months to
February 28, the managing director said on
highest in Southern Africa while the electricity
Friday.
costs remain prohibitive and most companies
are Revenue was at machinery that is expensive
stuck with aged $6.955 million for the two
to maintain.
months compared to $6.962 million over
The number of companies seeking
liquidation has progressively increased since
dollarisation in 2009. In 2010, 50 companies,
almost five times more than the prior year
Z
applied for liquidation. The number increased
to 73 in 2011 and more than doubled in 2012
to 149.
The number could be higher in 2013 as
the economy is stuttering in the aftermath
of a disputed July 31 election that extended
President Robert in 2013 and the managing
the same period Mugabe’s 33-year rule and
a cash squeeze that has reduced consumer
director Grace Muradzikwa said performance
demand.
is unlikely to improve over the half-year
Cecil Madondo of Tudor House
period.
Consultants who has managed 25 companies
“We do not think that revenues will grow
in nearly two decades, said most companies
substantially, even though wemanagementthat
were placed under judicial are hoping or
there would be gross mismanagement, told
liquidation due toan improvement,” she lack
The Source corporate governance
of effective at an analyst briefing. structures
and“But level of indebtedness.more on our
high we are focusing
bottomline. Because we technically insolvent
“You find a company expect revenues to
sometimes with costs should alsothan go up
remain flat, our more liabilities not assets
regardless of its viability,” he said.
He said undercapitalisation was a major
challenge facing most companies under
judicial management resulting in them failing
so we need to adjust our business model,
processes and the cost structure so that we are
still able to post a good turnover.”
The group launched Diamond Seguros in
Mozambique last month, whose prospects
Muradzikwa described as bright. “Our going
into Mozambique was driven by very strong
fundamentals and a very strong GDP growth
(of 7.4 percent in 2012, an revive them.
to buy basic material required toestimated 8.5
percent in 2013problem we growing by eight
“The major and is seen face as judicial
managersin lack of we think capital in order
percent is 2014), access to there is good
to address these problems,” he said.
potential,” Muradzikwa said.
Another judicial manager, Reggie Saruchera
“There are also very few players in the
of Grant Thornton said thewith Zimbabwe
market when you compare empowerment
law requiring foreign owned companiesninebe
(which has 29 players, compared to the to in
51 percent ownedthat localquite anwas making
Mozambique) so by was blacks attraction.”
it difficult for potential investors to put their
She added that the company, which also has
money in distressed companies.
business interests in Uganda, Zambia and
“There must be a difference on how the
Malawi, is also bailed out,” number
companywasbeing looking at a he said. of new
markets.
He called for a legislation that forces
“But here of distressed companies to
shareholders in Zimbabwe, the growth area
definitely is small to medium creditors.
relinquish power for the benefit of enterprises
(SMEs). don’t want topreviously shareholding,
“They We have relinquish focused on
corporates, but the corporates are struggling
they don’t have money to put into the business
and atissues samecapital, the depositors and
with the of time retooling and the
creditors are suffering, where do we draw the
line?” he said.
He also complained about the country’s
labour laws which were not favourable to
manufacturing sector is struggling with the
influx of imports,” Muradzikwa said.
“The thriving sector seems to be the SMEs
and the informal sector. I feel that the player
who is going to be successful is one who is
able to come up with a product offering which
would appeal to that target market. For us, we
do have something that we are rolling out. We
have to, we have no option.”
In the full year to December 31, the group
made a profit of $2.311 million compared to
$2.426 million in the prior year. Operating
profit grew by 53 percent to $2,347 million
from $1.526 million. Earnings per share at
0.40 cents were slightly lower than the 0.43
for the 2012 period.
Going forward, Muradzikwa said the
group would focus on product innovation,
its distribution models as well as containing
costs.
“There are certain things that are outside
our control. I cannot manufacture business
when the business is not there but there are
those things that are within our control and it
is those things that weof Grant Thorntonsaid.
Reggie Saruchera will focus on,” she
Umaa fulfilling food security mandate
T
Observer Reporter
he Umaa Institute
of Agriculture has,
since launch in 2005,
underscored
great
achievements in terms of producing
highly-skilled
and
qualified
students who are now employed in
he United States Embassy
commercial supported they launch
has farms, be the small,
mediumof large scale. Zimbabwean
or
the
Umaa founder and Women
Chapter of the African director
Dr Cleopas Kundiona said the
Entrepreneurship Program (AWEP)
at a funtion established in line
Institute wasin Harare recently. with
The group will work to expand
government’s call for the training of
and support Zimbabwean women
agricultural expertise to complement
in turn-around agrarian reform.
andbusiness as well as assist them
export goods and services to other
“This was in line with
countries, including the United
government’s food and security
States.
aspects to make sure that Zimbabwe
“I am excited to see the launch of
gradually retains its leading role as
this AWEP chapter in Zimbabwe,”
the bread basket of the southern
said Ambassador Bruce Wharton at
African region,” Dr Kundiona said.
the launch.
“On our part, the establishment
“I have often said that Zimbabwe’s
of the resource is its people – and
strongest Institute was also in
recognition of the fact of those
this is a perfect example that the
land distribution programme was
resources in action. I am confident
for the benefit of whomajority of
that these women, the have taken
initiative not only to was their
Zimbabweans and there start need
own businesses
to make it work.” but to contribute
to Dr Kundiona said what made
the Zimbabwean economy, will
make students different from other
Umaa impact the future of the
Zimbabwean training
agricultural economy.” institutions
Similar AWEP under training,
was that they went chapters have
been established in countries such
both theory and practicals, and also
as Nigeria and Zambia. Sylvia
Banda of Zambia, Pan African
AWEP Chairperson, is expected to
Advertise in
attend the launch ceremony which
will also be attended by senior
T
employers making it difficult for a judicial
manager to retrench where necessary in order
to revive a company.
visited several commercial farms
and agricultural companies for
practical purposes.
“This enables them to have
adequate agricultural industry
exposure in both diploma of
agriculture programmes, subjects
such as animal husbandry, the
government officials from crop Zimbabwe chapter is to capitalize
AWEP was established in coincides with the Africa Growth
production, agricultural engineering
Ministry of Women Affairs, Gender on providing (opportunity) for July 2012 by the United States’ Opportunity Act (AGOA) Forum
and Community Development; women in business.
and agricultural business,” he said.
Department of State through when held in Washington, DC, and
Dr Kundiona of was the and
and the Ministrysaid itIndustry duty
“We believe as AWEP that once international exchange programs is designed to help the entrepreneurs
of “us the indigenous entrepreneurs
involving American and African build business alliances, develop
women.
advocacy and communication
to invest in agricultural education
The program identifies and builds skills, network, identify resources to
in order for our men and women
networks of women entrepreneurs advance women›s entrepreneurship,
to be experts in their God-given
across sub-Saharan Africa who own and take advantage of opportunities
agricultural land and for them to
and run small and medium scale for US partnerships through
achieve the most-needed agricultural
businesses.
AGOA.
goal so that we can turn around our
Since its establishment, four
Trade between Zimbabwe and the
economy in line with ZimAsset”.
Zimbabwean
women
have United States continues to blossom
According to the ZimAsset
participated in the program and with Zimbabwe recording a trade
(RBM) System and will be used Value Addition and Beneficiation.
programme, in order to prevent said.
form the core of the group that is surplus in seven of the last nine
The Vision of the ZimAsset as a basis for the macroeconomic
“We
are
well-placed
to
future food shortages, the country
establishing a Zimbabwean chapter. years. According trade data from
Plan is “Towards an Empowered budgetary framework by Treasury, complement government’s efforts in
needs to promote policies and
They, along with four other the United States Department of
commencing from
2014 U.S. making agriculture a success, and the
strategies which increase the Society and a Growing Economy”. participants with theother fiscal Commerce, Zimbabwe imported
year.
first step in through the successful
demand for labour through a The execution of this Plan exchange programs such as the US$53 million worth of goods from
ZimAsset is a cluster based Plan, training of States personnel for the
strategy of broad-based, labour- will be guided by the following Fortune/State Department Global the United skilled while the United
reflecting the strong need to fully industry,” Dr Kundiona million of
intensive growth in agriculture, Mission: “To provide an enabling Women’s Mentoring Program, form States purchased US$52 said.
environment
for
sustainable the foundinginternal relationships goods. UMAA Institute was
exploit the committee for the
The
agro-industries and related sectors.
United States Ambassador Bruce empowerment and social chapter.
Wharton
and linkages that exist between established in 2005 and has so far
“ZimAsset can only be fulfilled economic
Participants to
AWEP
For more information please
when our men and women are well- transformation to the people of the various facets of the economy. graduated more than 700 students
Commerce.produce competently in women are given an opportunity to exchange programsas follows:to the contact not only employed but also
Zimbabwe”.
These clusters are travelled Food who are the AWEP chairperson,
trained to
Barbara in line with government’s
they entrepreneurs in 34 Lawson
The implementation of ZimAsset U.S. for three weeks where Social AWEP offices, the agricultural
Security and Nutrition;
agriculture Rwodzi, CEO of House succeed, they will do so,” she said.
of BarRue Knitwear, a successful will be underpinnedinand guided met business leaders, policymakers, Avenue; Milton Park; Zimbabwe,
“AWEP believes
expanding Services and Poverty Eradication; industry. ■
call for food security so that our
business that exports handmade women›s role in shaping national companies and industry associations, Tel. 08644110932 or visit www.
people are well-fed,” Dr Kundiona by the Results Based Management Infrastructure and Utilities; and
garments, is founding chairperson business climates and leading non-profit groups advocating for awepzim.org Twitter : @
of the AWEP chapter in Zimbabwe. the way in social reform. We women›s economic opportunities, awepzim
She visited the U.S. through the aim to transform Zimbabwean and
multilateral
development
, Call 0772 964428, email: [email protected], facebook: TheObserverZim
AWEP exchange in 2012. “The communities through business organizations.
main theme for the launch and the achievem ents.»
The annual exchange program
US backs Zim women entrepreneurs
to boost trade
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