New oil plant for Chitungwiza

HARARE - Surface Investments plans to set up a $7 million new solvent extraction plant to be operational early next year and will add $20 million annually to its current sales of over $40 million.

Executive director Narottam Somani said the plant to be based in Chitungwiza will also process soya beans into soya flour.

The produce will be further converted into high quality texturised soya chunks adding that the surplus soya flour would be exported to Japan and other markets where it has confirmed buyers.

“The development is in line with the company’s Vision 2014 of being the most efficient plant by world standards with $25 million budgeted for enhancing technological efficiencies as well as taking global competition head on,” he said.

The oil seed processing firm currently processes 400 tonnes of soya beans per day which yields to 320 tonnes of soybean meal.

Surface produces 70 000 litres of refined soya bean oil although cotton seed uptake is much higher at 600 tonnes a day.

Cotton seed processing translates to 300 tonnes of high protein meal, 150 tonnes of pelleted cotton hulls, 40 tonnes of linters and consequently 100 000 litres of refined oil.

Somani said the company will be installing a $800 000 modern bottle making and filling line with capacity to produce 500 cartons per hour to be operational by January next year.

“The machines are in transit and a new bottle with impressive labelling will be launched early next year,” he said.

He however, said the Zimbabwe Revenue Authority (Zimra) and other authorities were hampering efforts to ensure that its exports are expeditiously cleared.

“CD1 approval procedures and Zimra bills of entry procedures are delaying exports.
 
The procedures should be streamlined online and facilitate clearance as fast as possible. We cannot prepare documentation unless we load the truck and ascertain the exact quantity and value,” said Somani adding that government should also consider scrapping 15 percent value added tax (Vat) on cotton seed.

“There is 15 percent Vat on cotton seed while none of the products made out of cotton seed attract Vat.
This affects our cash flows very badly and moreover delays of Vat refunds from Zimra make it worse,” Somani said.

Somani highlighted the need for government to impose import duty on cooking oil from South Africa because some of it was being imported elsewhere then blended and packaged in South Africa.

This would mean that the cooking oil would be exempt from paying duty because it will be cleared as originating from South Africa under Southern Africa Development Community (Sadc) preference rates and these did not attract anything except import Vat.

“It is always declared in budget statements but never implemented, some of the imported cooking oil is palm oil and is mostly blended whereas ours is processed cotton oil seed which is cholesterol free, does not break down when heated and is of bland taste which means it does not impart any flavour to food,” said Somani.

Surface is projecting sales of over $40 million this year, out of which $20 million will be exports and is confident in achieving an operating profit of seven million dollars.

The company’s total annual production stands at 150 000 tonnes of cotton seed which produces 30 million litres of cooking oil per annum.

The company also provides stock feed as the pelleted cotton hulls and high protein meal are of high fibre feed that is in demand with surplus product exported to regional and overseas markets.

More than 50 percent of its production is exported mainly to China, Germany, Japan, Malawi, South Africa and Zambia among others.

Surface is now the largest employer in Chitungwiza with over 550 workers and is directly supporting the agricultural sector through value addition to produce.

The firm is a joint venture company where Midex Group PLC owns 74 percent while Industrial Development Corporation (IDC) holds a 26 percent stake.

The company has already submitted a plan to government for compliance with indigenisation regulations currently being undertaken through out all sectors of the economy and while a listing on the Zimbabwe Stock Exchange will be pursued.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.