SA buys Zimbabwe

The influx of South African corporates continued even as the retail sector was shaken by this week’s government-sanctioned seizure of the Zimbabwe Stock Exchange-listed Meikles group for allegedly sending huge sums of foreign currency to offshore bank accounts.Meikles is 25 percent owned by South African company Pick ‘n Pay. Zimbabwe’s retail sector is now largely controlled by South Africans. Supermarkets around the country are stocked with South African products, from basic food items such as onions, potatoes and even mealie-meal, to luxury wines, beers, spirits, steaks, dried meats. Buoyed by renewed hope in the Zimbabwe economy, South Arica’s food giants Steers, Debonairs and Protea are refurbishing their dilapidated enterprises. Even the beer industry, trumpeted as a local success story, is run by SAB Miller, which recently poured US$16 million into local subsidiary Delta Beverages. The gold-mining industry is controlled by SAs AngloGold, now merged with Ashanti Goldfields, and Randgold and Metallon Gold, owned by mining magnate Mzi Khumalo. ABSA, through Stanbic, is growing its formidable presence in the banking industry, while South African Airways (SAA) has taken over as the unofficial national airline after Air Zimbabwe was declared insolvent recently.

African Rainbow Minerals (ARM), an investment vehicle set up in Zimbabwe by South Africa’s first black billionaire Patrice Motsepe, is pumping US$300 to mine the vast coal and platinum resources. Zimbabwe has the second-largest platinum deposits in the world after South Africa, and these abundant reserves of gold, platinum, coal, diamonds, nickel, iron ore, copper and coal-bed methane, remain largely untapped. “We are prepared to invest in Zimbabwe’s mining sector and are willing to inject not less that US$300 million for mining activities as soon as a consensus with the Ministry (of Mines) is reached,” said David Simelane, ARM’s business development manager.

SA businesswomen visit Zimbabwe has also witnessed an influx of individual South African businesspersons keen to invest.

Just last week, a 43-member delegation of South African businesswomen led by Dr Thandi Ndlovu, who owns the South African conglomerate Motheo Construction Group, expressed interest in investing in construction, mining, foreign currency trading, tourism, media, agriculture, energy, health, pharmaceutical, manufacturing and finance in Zimbabwe. They dismissed concerns by United States-based investment guru Dunn and Bradstreet that “Zimbabwe and Afghanistan offer a high-risk environment for business investment.” This delegation came hard on the heels of 22 businessmen, led by Motsepe, two months ago to explore opportunities and sign an investment guarantee with government officials. The team, which met President Mugabe and warned him against “changing goal posts” and expressed interest in mining, banking, construction, retail and textile firms in Zimbabwe.

Ramaphosa wants Econet

South African businessman Cyril Ramaphosa, through his investment vehicle Shanduka Group, is believed to be in talks with Econet Wireless, to snap up its shareholding in Mutare Bottling Company, an investment the mobile group considers a non-core asset. The massive interest by South African business in Zimbabwe follows pleas by Prime Minister Morgan Tsvangirai in May to the business community in that country to seek opportunities in Zimbabwe because “South African companies are better placed to understand the environment in Zimbabwe,” Tsvangirai said at a dinner with South African business and government officials in May. Economists say bad investment laws have led to the withholding of investment, mainly from the West, badly needed to raise production as Zimbabwe tries to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai. Zimbabwes recovery will largely depend on the will of the government to provide a conducive environment for investment. Signing bilateral trade and investment treaties with investment protection guarantees will indicate its commitment to facilitate operations of the private sector, says Tinei Muwandi, an audit manager at Ernst & Young.

Escom manages Zesa

Escom Enterprises, the giant South African power utility, is the major supplier of electricity to Zimbabwe. It has a utility management contract with ZESA and there are negotiations that could see the local power utility eventually falling into Escom’s lap. South Africa’s Development Bank of Southern Africa (DBSA) has been shoring up Zimbabwe’s bankrupt seven-month old inclusive government. DBSAs chief economist Sam Muradzikwa said the bank was keen to support the reconstruction efforts in Zimbabwe and had been actively exploring potential investment opportunities in the energy, telecommunications, mining and agribusiness sectors since the inception of the unity government. We are confident of growing this pipeline to include other sectors, and that the downward cycle in Zimbabwe has turned for the better, Muradzikwa said. Investment company Zimvests managing director, Shaun Lightfoot, said: “Recent changes in Zimbabwe have resulted in the emergence of an increasing number of potentially lucrative investment opportunities.”

Engen takes over BP, Shell

This week Engen, South Africas leading refined petroleum products company, announced a sale and purchase agreement to jointly acquire all the shares in Shell Zimbabwe and BP Zimbabwe. The two oil companies ran 75 service stations countrywide, together with depots in all major centre. The announcement came as executives from Shoprite Holdings Ltd, South Africas biggest food retailer, toured branches of OK Zimbabwe Ltd amid reports that the South African giant retailer was planning to acquire a controlling stake in the supermarket chain. Pick ‘n Pay, an investment holding company that holds a 25 percent stake in the TM supermarket chain, is planning to open Pick ‘n Pay supermarkets, Price Rite, more TM and Family stores in Zimbabwe, an authoritative source told The Zimbabwean**********.

South African company Tongaat Hulett Ltd., the sugar company part-owned by Anglo American Plc, announced last month that it would pump R145 million into its three vast Lowveld sugar plantations and mills to restore full productivity. The company said it was encouraged by the formation of the inclusive government and the adoption of the US dollar and the rand as official tender. Steel maker Arcelor Mittals South African unit is reportedly interested in taking over the bankrupt state-owned Zimbabwe Iron & Steel Co.