United Refineries Ltd revives exports

Dumisani Nsingo
Leading personal care and agro-commodities processor, United Refineries Limited (URL), has revived exports of its wide range of products into the region.

This comes as a number of companies are responding to some policies that include SI 64 of 2016 and some export incentives offered by the Central Bank.

URL chief executive officer, Mr Busisa Moyo said the company recently started exporting to Namibia while efforts are underway to explore other countries within the region.

The company was forced to halt exports around the year 2000 due to a myriad of challenges, including a downturn of the economy due to illegal economic sanctions.

“We are exporting to Namibia and are preparing for Malawi and Botswana in the next few weeks,” said Mr Moyo.

URL, which has sustained its operations for the past 18 years through processing cooking oil and laundry bar soap, has over the past few years re-introduced and launched a number of products.

The company has been on a recovery path since 2014 when it secured funding to refurbish machinery at its Bulawayo factory. It has been reviving production for several of its brands.

Three years ago, the Bulawayo-based company re-in­tro­duced its three ranges of soap whose pack­ag­ing is in­scribed in English as well as Por­tuguese to tar­get both English and Por­tuguese speak­ing na­tions.

Last year, the company also launched its new mayonnaise line under the Roil Mayonnaise brand.

An olive oil brand was also launched, with the raw olives being imported from South Africa’s Eastern Cape.

Towards the end of last year, URL expanded its range as a food and grocery products processor, focusing on servicing local, regional as well as international markets.

Early this year, URL added vegetable juice manufacturing to its wide product mix as part of its diversification strategy, which has also seen it recently introducing its own brand of mealie-meal.

“We are satisfied with our new market introductions and we are developing our market awareness and presence,” said Mr Moyo.

He, however, said efforts to introduce laundry powder soap have been stalling.

URL mooted investing more than $1 million towards the setting up of a laundry powder plant three years ago. However, the company has been hesitant to go ahead in the face of stiff competition due to the influx of cheap options on the market.

“We are unable to get adequate foreign currency for our current offering so we are waiting for that to improve before adding any more new lines,” said Mr Moyo.

He said the company needs $4 million in working capital per month for it to operate full throttle.

“On crushing, we are (operating) at below 10 percent (capacity utilisation) due to low farming output of soya beans.”

The early crop assessment report issued by the Ministry of Lands, Agriculture and Rural Settlement on May 9th, 2018, show that the country produced only 60 000 tonnes of soya beans, against a requirement of 384 000 tonnes per annum or 32 000 tonnes per month.

Zimbabwe requires about 300 000 tonnes, with oil expressers alone requiring 150 000 tonnes to meet their needs.

Last year, imports of soya beans drained $172 million from the fiscus, with farmers only managing to produce 30 000 tonnes.

Mr Moyo said on refining and soap production, they are operating at between 40 to 50 percent of our capacity due to foreign currency constraints as they require USD4 million per month to supply the markets.

Mr Moyo said progress towards the listing of the company on the Zimbabwe Stock Exchange (ZSE) is at an advanced stage.

“We have engaged a team of advisors and we have been officially invited by the ZSE to list the business,” he said.

URL is moving towards initial public offering grade (IPO) as part of its efforts to grow its business.

IPO refers to a process of floating shares or going public in which a privately owned company is transformed into a public company.

IPOs are usually used to raise new equity capital for a concerned firm or monetising investments of private shareholders such as company founders or private equity investors to enable easy trading of existing holdings.

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