Last week Nestle Zimbabwe, along with other foreign-owned companies, received a letter from Indigenization Minister Saviour Kasukuwere which stated that the company submissions for indigenization had been ‘unacceptable’.
Kenyan-based Brindah Chiniah, Nestlé’s corporate communications manager for the region, said in an interview that the milk and cereal products manufacturer had been in Zimbabwe for the past 50 years and would continue to strive through good and bad times.
“Nestlé has been in Zimbabwe for 50 years, working with the population of Zimbabwe and striving to maintain a long-term viable operation in often challenging conditions. We operate in Zimbabwe, as we do in every country, through good times and bad. We work for the long-term, in a way which has positive impact on our consumers, employees and suppliers,” said Chiniah.
Nestlé submitted its first plan in November. The law compels foreign firms to cede 51% ownership to black Zimbabweans. Despite concern over the future of foreign corporations in Zimbabwe because of the policy, Nestlé said it would continue with expansion at its Harare manufacturing plant.
Saying its focus for now was for the long-term prospects and that it would continue operating "through good and bad times" in Zimbabwe, just as it did in several other hot-spot countries. The factory in Zimbabwe is important for Nestlé in meeting rising regional demand for its foodstuffs.
But the Swiss based company has been under pressure since it stopped buying milk from President Robert Mugabe’s Gushungo farm after an international outcry over the dealings with the Zimbabwean dictator. Despite threats of seizure it says it will continue with its long term plans and is currently expanding in order to meet rising demand in products regionally.
Nestlé’s rejected submission had proposed it dispose of 25% equity to the company’s Zimbabwe pension fund, the Nestlé Zimbabwe Pension Fund, while the remaining equity would go to the firm’s employees under an employee ownership and empowerment scheme.
Chiniah added that Nestle would, “remain in continuous consultations with concerned authorities on the subject. We are confident that our proposals will contribute to the growth of the economy of Zimbabwe.”
Other companies such as Zimplats, New Dawn Mining and Mwana Africa have also had their initial plans rejected, with Kasukuwere indicating this week that the Implats Zimbabwe division is set to lose its license.
Some of the rejected submissions entailed listing on Zimbabwe’s bourse and social development credits as part of plans to comply with the law.
Post published in: Business