Local firm buys Zimglass for US$22m

Source: Local firm buys Zimglass for US$22m | The Herald

Local firm buys Zimglass for US$22m

Martin Kadzere Senior Business Reporter
LOCAL firm, Brainman Investments, has acquired Zimbabwe Glass Holdings (Zimglass) for US$22 million in a development likely to pave way for the revival of the country’s sole glass manufacturer.

Zimglass was owned by state-owned Industrial Development Corporation of Zimbabwe, which is in the processing of restructuring some of its subsidiaries and associate firms.

The restructuring is not only confined to total disposal of subsidiaries and associate companies, but also entails liquidation, privatisation and partial privatisation. Zimglass was under final liquidation.

“The deal is sealed,” liquidator Mr Winseley Militala told The Herald Finance & Business on Monday in an interview.

“The money has been paid and we are now working on paying of all creditors.”

Zimglass ceased operations in 2010 and has been failing to secure funding, leading to its placement under judicial management in 2014.

At that time, its creditors amounted to US$34 million. About US$10 million is required to revive the plant, whose bulk of equipment is now beyond repair. The only most valuable asset owned by Zimglass is Industrial Sands, a company which supplies the major raw materials for making glass.

The closure of Zimglass has resulted in the country importing all its glass requirements after several efforts to bring in new investors failed to materialise. In the 10 months to October last year, Zimbabwe imported various glass products worth nearly US$12 million, according to data from the Zimbabwe National Statistical Office.

Some of the companies, which expressed interest in buying the Gweru-based glass making plant include Nampak, Kioo Ltd of Tanzania and Mauritius-based Sahara. Alternative Investment Africa and Global Emerging Markets — a major shareholder in RioZim, once expressed interest in Zimglass. The company used to produce about 240 tonnes of glass material per month for making bottles of beer, soft drinks, food, pharmaceuticals and kitchenware. The company employed 500 employees. It was established in 1963 as a subsidiary of Consol Glass and became an IDC subsidiary in 1984.

It’s major customers included Delta Beverages, African Distillers, Mutare Bottling Company, Straitia Investments, Olivine Industries, Datlabs and E. Snell and Company.

In 2015, Mr Militala recommended the liquidation of the company, arguing that it had failed to secure investors willing to turnaround its fortunes. Zimglass’ liabilities stood at US$34 million as at June 2015, against assets of about $2,2 million.

So far, IDCZ has disposed of its 51 percent shareholding in Almin Metal Industries, 49 percent interest in Stone Holdings, while Zimbabwe Copper Industries was liquidated. Potential investors for Irazim Textiles and Travan Blankets have been identified.

The IDCZ identified a partner who injected capital into Amtec Motors thus reducing the IDCZ’s shareholding from 55 percent to 27,5 percent. IDCZ also received bids for Chemplex, which required between US$70 and US$10 million for recapitalisation.

Potential investors for Willowvale Motor Industries and Deven Engineering have been shortlisted.

There is huge demand for glass products in Zimbabwe, but many dealers have been importing the product from China and South Africa because of limited availability locally.

The construction boom locally has seen huge demand for glass products.