Source: IDC to dispose of ailing companies | The Herald December 23, 2016
GOVERNMENT has directed the Industrial Development Corporation to identify for disposal, ailing companies under its ambit that are non-core to its new mandate and in line with the country’s industrialisation strategy.The directive follows approval of the restructuring of IDC by Cabinet a fortnight ago, Industry and Commerce Minister Mike Bimha said this week.
“Two weeks ago I presented a paper to Cabinet on the restructuring of IDC. IDC is a very big conglomerate.
“The paper was to get Cabinet approval on the measures that we want to employ to restructure IDC. One of the measures is to look at some of the companies that we can dispose of,” said Minister Bimha.
What has been of major concern to Government is that the IDC had become a “big group”, but with ailing companies, which have weighed down on the corporation and have now become a bother, according to Minister Bimha.
The IDC is mandated to establish and conduct any industrial undertaking, to facilitate, promote, guide and assist the financing of: new industrial undertakings (including small and medium scale), schemes for the expansion, better organisation and modernisation of and more efficient carrying out of operations in existing industries and industrial undertakings.
It is also mandated to implement Government policy with regard to decentralisation of industry, choice of technology and any other matter, which the Minister of Industry and Commerce may specify and to take measures to acquire direct and effective control of its investments.
To that end, this is meant to ensure that industrial development in Zimbabwe maybe planned, expedited and conducted on sound business principles.
Almin Metal Industries, Amtec (Pvt) Limited, Deven Engineering (Pvt) Limited are some of the companies under IDC. Some of them have been struggling and draining the corporation’s financial resources.
“What has been happening was that a number of companies, some of them which were ailing were added on to the IDC. IDC then became a big company but with ailing companies.
“The idea is for the IDC to have a proper focus, a focus within its mandate. And the mandate of the IDC is to play a role in the industrialisation strategy. Therefore, it can only do that when the focus is on just industrialisation as opposed to carrying a lot of these companies.
“Some of these companies that the IDC is carrying will fly if they are taken over by people with money and expertise in the particular fields,” said Minister Bimha.
Cabinet’s approval was to empower management and the board to consider which companies can be disposed of.
“We will identify those that are non-core to this thrust on industrialisation. After we received Cabinet approval of the restructuring exercise we have asked the board and management to bring to our ministry their specific recommendations of which companies can be disposed,” the minister said.
In some cases the board and management have already identified buyers and investors who are interested in some of the companies.
Moreover, Government is keen to empower locals through the disposal exercise.
“We actually want to ensure that in the disposal exercise we also achieve our objectives in terms of indigenisation and empowerment.
“We will invite locals who want to participate, can raise selling prices and have a passion in running the companies can get into joint ventures with other investors,” said Minister Bimha.