A KOREAN investor, Young Chul Baik, which recently acquired 46 percent shareholding in the Zimbabwe Stock Exchange-listed Amalgamated Regional Trading Limited (ART), has not yet discussed its plans for the group, an official has said. Industrialists in the eastern region anticipate the new investor to revive Art’s subsidiary, Mutare Board and Paper Mills (MBPM).
MBPM was the country’s sole newsprint producer and a major employer in the province. The closure of the firm has forced the country to import newsprint, externalising much-needed foreign currency. Group company secretary Franklin Mukarakate told the Financial Gazette’s Companies & Markets the investor had not yet discussed its plans at board level. “There is a Korean investor who has now acquired 46 percent, so far, of the company’s shares, (but) his plans have not been discussed even at board (level),” said Mukarakate in a telephone interview.
He said the future of MBPM would only be known once a business plan by the new investor had been tabled before the board. Timber Producers Federation (TPF) chairperson Joseph Kanyekanye indicated at recent Forestry Indaba that some Chinese investors were keen to inject US$25 million to resuscitate the newsprint company.
“There is an integrated project by various timber producers who engaged some Chinese investors. The investors were keen to pour US$25 million into the project,” said Kanyekanye. He could not reveal the identity of the Chinese investors, nor timber producers involved in the “integrated project”.
However, Mukarakate said he was unaware of overtures to revive the newsprint plant by Chinese investors. “I am not aware of any such plans. As the group company secretary I should be the one with that information so I am not aware of that. If there are any such plans, I am the person to disseminate that information,” he said.
MBPM managing director Tich Shonhiwa said there was need to acquire new machinery at the factory as the old plant was out of use. “There is no longer machinery at the factory, what’s left is just scrap metal. Remember the plant was bought in 1952,” said Shonhiwa during the Forestry Indaba.
MBPM started manufacturing paper board in 1953 before introducing newsprint production in 1962. MBPM, which is a division of ART, closed its newsprint division in November 2009 due to viability problems, caused largely by undercapitalisation and antiquated machinery. - Kenneth Matimaire
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