The Sunday Mail
OLIVINE Industries Limited, which is 51 percent owned by Government through the Industrial Development Corporation (IDC), expects to ramp up the production of margarine and bakers’ fats, riding on the suspension of customs duty on hydrogenated soyabean oil by Government.
Currently, the margarine and bakers’ fats sector is operating at about 35 percent, weighed by challenges in procuring raw materials, of which hydrogenated soyabean oil is one of the key inputs.
Government gazetted Statutory Instrument 90 of 2017 to allow the fast moving consumer goods manufacturer to push up its raw material stock and consequently increase production.
Singapore-based shareholder, Wilmar International, and Midex Group hold the remaining 49 percent stake in Olivine.
Duty waived
Through SI 90 of 2017, which was gazetted on August 4, 2017, Finance and Economic Development Minister Mr Patrick Chinamasa waived duty on hydrogenated soyabean oil imports for a year.
But only 240 metric tonnes per month are allowed to come in duty free.
The dispensation is particularly tailored for Olivine and does not cover other local manufacturers.
Hydrogenated soyabean oil is used in the manufacture of margarine and bakers’ fats.
IDC spokesperson Mr Derrick Sibanda told The Sunday Mail Business last week that the suspension of duty on hydrogenated soyabean oil will help Olivine to push up the production levels of margarine and bakers’ fats.
“Hydrogenated soyabean oil is used for making margarine and bakers’ fats. At the moment, as you know, there is not much soyabean that we can mop up on the local market.
“So while we are trying to build up into our contract farming (projects), we need to be able to import that hydrogenated oil to be able to make the margarines and the bakers’ fats.
“We have enough capacity (to produce) as long as we have the raw materials; that is why we want to import hydrogenated oil. Right now we are operating at round 35 percent on the fats and margarines (category),” said Mr Sibanda.
Last year, Olivine announced that it was investing US$15 million in margarine processing technology and a soap plant as part of efforts to improve availability of Buttercup margarine and several soap brands.
Old equipment
The investment into the equipment – which is taking place in three phases and over three years – saw the return of Buttercup to supermarket shelves after a two-year absence.
Margarine production at Olivine was being hampered by old equipment, some of which was installed in 1947, resulting in the firm losing a considerable market share to other companies.
Olivine, which was established in 1931, is currently producing cooking oil, Buttercup margarine and Jade toilet soap, which are readily available on the market.
The company has a range other products such as vegetable oils candles, dried beans and a variety of canned foods.
It also plans to reintroduce some of its traditional laundry soap brands in the second half the year.
