The Sunday Mail
There are signs of life at Blue Ribbon Industries after the Bakhresa Group of Tanzania, which took up a 75 percent stake in the business last year, pumped in more than US$18 million in fresh capital. However, some local businessmen are laying claim to BRI unit JA Mitchells, while employees are demanding salaries that are 20 percent more than the National Employment Council negotiated rate.
Popular for its mealie-meal brands Ngwerewere and Chibataura, BRI was placed under judicial management in 2012 after battling funding constraints and debts of over US$2 million.
Judicial manager Mr Reggie Saruchera of Grant Thornton stitched up a deal with Bakhresa, whose owner is Mr Said Salim Bakhresa — a man whose net worth Forbes magazine has estimated at US$600 million.
The new investors are expected to pour in more than US$40 million over the next three years.
Last week, Mr Bulisa Mbano, an advisory manager at Grant Thornton, told The Sunday Mail Business that operations had resumed at BRI.
“Work has started already after the investor brought in money. The money is about US$18 million of which US$15 million was in cash while US$3 million was in the form of grain.
“They are already working but there is a lot of updating of machinery that is required because most of the equipment is in a state of disuse. So it takes time to put the firm back on its feet,” said Mr Mbano. Blue Ribbon is importing parts from Switzerland to refurbish its plant. The old plant will subsequently be replaced by a new one. But as the deal is beginning to take hold, there are new fears that a clique of local businessmen, who are claiming ownership of BRI’s subsidiary JA Mitchells, could scare away the investor.
Mr Mbano said of this development, “Mitchells is part of Blue Ribbon; the scheme of arrangement is for Blue Ribbon and its subsidiaries which include Nutresco and JA Mitchells. It is just a case of some unscrupulous people who are trying to take the brand.
“They are claiming that when the company was closed, the brand was inactive so they want to take advantage of that but that could scare away the investor. “It is bad because we looked for an investor told him the brand (Mitchells) was his and all of a sudden you start to go to court, it is really embarrassing. Local businesspeople should not act that way, I am actually under siege.” He added that it was unfair to subject the new investor to court wrangles barely a year after pumping in money. It is also understood that some employees are making it difficult for the investor by demanding salaries that are above the NEC rate.
BRI has about 200 employees.
Mr Mbano said: “It’s embarrassing really, people who are getting salaries every month, more than you (sic) were getting before, and they are getting big-headed. “Those are the few areas that we want to tighten screws on, otherwise they are operating. I wouldn’t know exactly when commercial operations begun because I am not privy to that detail but they are running, of course not at the Bakhresa level.”
BRI’s rehabilitation will present new competition for bread, flour and maize-meal manufacturers.
Initially, the proposed acquisition of BRI by Bakhresa was met with resistance by groups such as the Grain Millers Association of Zimbabwe that felt that the 10-year period that will be taken by the investor to comply with empowerment regulations was unnecessarily long.
