United Refineries to raise cooking oil output

via United Refineries to raise cooking oil output | The Herald 17 July 2014

UNITED Refineries Ltd, a Bulawayo based agro processor is set to raise cooking oil output due to improved availability of cotton seed while it intends to resume stock feed production.

Managing director Mr Busisa Moyo said on Tuesday the company was targeting to increase capacity utilisation of its main edible oil plant to between 80 and 90 percent this quarter from around 70 percent due to improved availability of the key raw material.

Cotton seed and soya bean are primarily processed into cooking oil and the protein-rich seed cake. The cake, a by-product of the oil extraction process, is an important protein source for livestock, particularly in the poultry and piggery sub-sectors.

URL is the country’s second largest cooking oil firm and can process 8 000 tonnes of oil seeds per months.

Mr Moyo said there is an improvement in cotton seed supplies since the beginning of the cotton selling season last month and this will enable URL to utilise idle capacity.

“We only had soya bean but with cotton seed coming up, we are targeting to increase capacity utilisation to between 80 and 90 percent,” said Mr Moyo.

“We are also expanding into cake production, an important raw material for stock feed.”

The cotton marketing season started last month and the crop is being sold at 385 buying points across the country. At least 16 buyers are registered to buy the crop this season.

About 8,5 million kg of cotton have been sold since the beginning of the marketing season. Cotton output for this season is projected to rise to about 190 million kilogrammes from 145 million in 2012 /2013 season, according to the Cotton Growers Association.

Last year, Grindrod Trading, a South African company acquired a majority stake in URL which resulted in the injection of capital to boost capacity. This resulted in the company initially lifting capacity utilisation to around 50 percent from an off low base of 10 percent.
Grindrod Trading is a subsidiary of Grindrod Limited, a JSE-listed South African-based holding company involved in the movement of cargo by road, rail, sea and air. Grindrod Limited operates four divisions – shipping, trading, financial services and freight services.

Under the transaction, GT is arranging lines of credit for URL to boost capacity. This is in addition to a commercial contract signed for the supply of the raw materials.

At least US$10 million is required to boost the capacity of the business, Mr Moyo said early this year.