French firms scout more Zim deals

12 Feb, 2017 - 00:02 0 Views

The Sunday Mail

Business Reporter —
FRENCH companies continue to express interest in investing in Zimbabwe, with several currently making enquiries with various Government agencies.

There are presently over 30 French companies operating in Zimbabwe, which include Total and Zimbabwe Stock Exchange-listed Lafarge Cement. Another firm, Lesaffre, launched its baking centre in Harare on Wednesday.

Deputy head of mission at France’s Embassy in Harare, Mr Lionel Canny, told The Sunday Mail Business last week that, “We are receiving many business delegations who are searching for more investments in the country and we are here to help them to follow the procedures of the (Zimbabwe Investment Authority) in the land . . .

“Consequently, we are going to provide the country with technical skills, machinery, expertise and create employment,” said Mr Canny.

Companies like Proparco and Bureau Veritas are expected to expand their Zimbabwe operations this year.

Proparco (Company of Promotion and Participation for Economic Co-operation) is a financial development institution that specialises in private sector financing.

So far it has extended US$60 million to local financial institutions, while other negotiations are on-going.

Bureau Veritas, which was contracted by Government to check the quality of imported goods, is currently providing testing services for mining and agro-based industries. The company’s mandate is to prevent the influx of cheap goods onto the local market.

It is hoped Lesaffre’s investment might help convince fence-sitting firms to commit to Zimbabwean investments.

“In 2016, when Lesaffre did an acquisition of Anchor Yeast, capacity utilisation was very low, but now it has greatly improved resulting in it exporting some of its products to Zambia, transforming the Gweru yeast production factory into a state-of-the-art facility and employing many people in the process,” Mr Canny said.

Lesaffre acquired a 60 percent stake in Anchor Yeast for US$14 million and has invested more than US$3 million in working capital to date.

Equity financing is considered to be more ideal than debt financing, especially for an economy whose risk premium is relatively high because of the illegal Western economic sanctions on Zimbabwe.

In January 2016, a business delegation led by the Movement of the Enterprises of France spent four days in the country scouting for opportunities.

In the delegation were representatives from companies whose total annual turnover is more than US$1 billion.

Business is expected to benefit from the progressively improving relationship between Zimbabwe and Europe. In October 2016, the country hosted a delegation from Switzerland that had been invited by the Association for Business in Zimbabwe.

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