Banks stampede to fund Mugabe’s Alpha Omega empire

PRESIDENT Robert Mugabe’s family dairy business, Alpha Omega,whose funding has always been queried, is on the verge of completing a multimillion dollar expansion exercise thanks to local banks, a company official said.

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Taurai Mangudhla

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Alpha Omega general manager Stanley Nhari said local banks, in particular the Industrial Development Bank of Zimbabwe (IDBZ) and CBZ Bank, were funding the ongoing expansion. “At the moment I am not in a position to say how much the plant has cost because we are still installing some ancillaries. We are borrowing the money from banks; it’s something which is very clear, we borrow from CBZ, we borrow from IDBZ and we borrow like any other company,” he said during a tour of the Alpha Omega plant in Mazowe this week.

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Government remains the largest single investor in CBZ Holdings and owns more than 99% of IDBZ, making them amenable to fund top state officials’ businesses and other interests. The local banks’ decision to fund Mugabe’s business raises questions at a time companies, even those listed on the Zimbabwe Stock Exchange, are crumbling due to lack of capital as the economy suffers from tight liquidity.

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The expansion project, expected to improve the company’s product mix, will see Alpha Omega add two new state-of- the-art ice cream manufacturing plants and a chocolate manufacturing plant by end of March, management said. The two ice cream plants have already been imported from Italy and are at advanced stages of installation.

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Information gathered by businessdigest shows a modern high quality ice cream processing machinery production line plant from Asia costs around US$1 million. Market information suggests the price is much higher in Europe. “We have done much of the installation which is required by our company. We expect the technicians from the various suppliers to be landing in Zimbabwe by mid-March so that they finalise installation and then we kick start the ice cream production. We believe that before the end of this month we will have the ice cream on the market,” Nhari added.

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Two hundred vendor cans have already been purchased and will be used to sell the ice cream at different points, he said. Management said the company would start producing pure chocolate, chocolate ice cream, chocolate bars, sweets and candy by end of March.

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Alpha Omega said it was also targeting to double raw milk output to 40 000 litres per day by year end, from the current 23 000 litres per day.

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Nhari said the company was breeding heifers internally and also importing from other countries. The company has resolved to induce its herd to ensure the cows go on heat after which mass artificial insemination would be done to boost its herd, he said.

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“Apart from this, we are doing an expansion on the beef side, we don’t want to only concentrate on dairy. We are also increasing our seed production and we do it through Seedco,” said Nhari.

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Alpha Omega’s beef herd currently stands at around 3 000 and the company’s target is to treble it in the short to medium term. In terms of capacity utilisation, Nhari said the production plant was operating at around 20% due to economic challenges.

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“We are just around 20% capacity utilisation and we are not happy at all. We can’t produce products which will not be bought. There is no cash in the market and whatever people have will be prioritised and if people have to make a choice between a dairy product and maize meal, they will go for maize meal,” he said.

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The company will start exporting some its products to grow sales, he added. The first batch for export is expected to be sent to Botswana in April.