News Update as @ 1530 hours, Friday 27 June 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

• Group to record improved profits on enhanced capital structure

Zimbabwe's largest news media house Zimbabwe Newspapers (1980) Limit-ed's re-capitalisation efforts are nearing full circle and the company expects an improved profitability in FY2014.

Group chief executive Justin Mutasa told the company's 86th AGM this afternoon that the "company is now almost fully capitalised".

Zimpapers commenced its re-capi-talisation programme in FY2013 and expects to start yielding benefits from the process in the current financial year.

In an interview on the sidelines of the AGM, group finance director Adolf Majome said the new systems should be fully operational in the second half of the year.

"The three-pronged re-capitalisation programme which began last year has resulted in upgrades in the system side through the implementation of the 4C Plus, the newspaper printing press and the printing press for the commercial division. What remains now are down-

stream adjustments to complement what we have already put in place," he said. Majome said the revitalisation of the commercial division will allow the company to recover a market that were being lost to players in the region, mainly South Africa.

In addition to the re-capitalisation, the group has been introducing a number of new products that will markedly change its capital structure.

Zimpapers has been moving to become a key player in broadcasting with the introduction of StarFM and the impending establishment of a new tel-evision station.

It has also diversified into digital with products such as BH24 and mobile news that have broadened the compa-ny's revenue streams. "With the new

revenue streams we are expecting improved profitability and our targeted profit in the current financial year is $2 million," said Majome.

Meanwhile, the AGM saw the compa-ny's shareholders adopting financial statements and reports of the direc-tors and auditors for the year ended December 31, 2013, and confirmation of the resignation of Dr Paul Chimedza, Dr Munyaradzi Kereke, Retired Briga-dier Epmarcus Kanhanga, Chakanyuka Karase, Alexander Kanengoni and Joseph Mandizha.

These have been duly replaced by George Manyere, Terence Hussein, Felix Moyo, Rejoice Nharaunda, Kar-ren Dube, Doreen Sibanda and Bishop Manhanga. Dr Charles Utete has been confirmed as the chairman of the com-pany's board of directors. •

Zimpapers recapitalisation nears completion

Mr Mutasa

BH24

By Lynn Murahwa

Cottco Group Limited has recorded a significant $6,9 million profit less than it recorded the prior year and is now expecting to start seeing profits in two years.

Head of finance Dacyl-Ray Rambane-pasi told an AGM yesterday that the group recorded a significantly less profit than they had in the previous year. "Cottco’s profit after tax from continued operations declined by 484 percent from $9,6 million to $2, 7 mil-lion recorded in the previous year," she said. She added that although operat-ing profits were beneath prior year, a $2,6 million profit has been recorded.

"Our operating profits though lower than what we achieved last year we

have got a profit after tax of $2,6 million, this is because the business has posted a profit on the disposal of Seedco and Olivine of $37 million," she said.

Collins Chihuri, the group's managing director, said they are putting in efforts to reduce the future level of losses but are only expecting to witness a profit in 2016. ”We have made a loss and we

are working hard to reduce the level of the loss and at best it will be break even. We will not be in a profit zone this time around but in 2016 we have got to be in profitable territory" said Chihuri. According to Chihuri the group has proudly contributed $31 million towards national funding. ”If we look at overall national funding this year as an industry we have put in a minimum of about $31 million compared to the $24

million in the previous season, so there has been a fair share of funding from ginners this season" he said. Financial statements show that sales volumes for the company decreased 77 percent to $35 million recorded for the year ended March 2014 from $150 million recorded in the prior period

"Our sales volumes are down as a result of the national crop production and our share of it which both declined in the year under review. The decline by 67 percent was mostly driven by that particular decline" said Rambane-pasi. According to Rambanepasi the strengthening of the international lint prices did not improve the group's sales volumes. ”As expected volumes are down meaning our revenue has come down despite the firming of lint prices. Lint prices on the international market improved from 80 cents per pound last year and the business itself achieved an average of 89 cents per pound. As a result we are seeing declining operat-ing margins from the cotton business, " she said.

The group's financials show their debt as at March 2014 reduced 66 per-cent from $126 million in the previous period to $41,6 million. •

3 NEWS

Cottco expects profitability in 2016

BH24

5 NEWS

By Tawanda Musarurwa

Bottled water and soft drinks manu-facturer Schweppes Zimbabwe says its export business is now active and the company has lined up the Angolan and Democratic Republic of Congo as it spreads its wings into SADC.

Managing director Charles Msipa said the company had decided to focus on the regional markets due to the depressed demand on the local mar-ket.

“Because demand on the local mar-ket is subdued, we have since re-in-tensified our focus on exports into the region and we are having good export

business in Zambia and Botswana. “We are currently cultivating Angola and Democratic Republic of Congo to try and penetrate those two markets because we only started exporting in January this year,” he said.

Msipa, who is also the president of the Confederation of Zimbabwe Industries (CZI), was speaking to journalists on the sidelines of a breakfast meet hosted by the Africa Leadership and Management Academy (ALMA).

The expansion in the region should result in Schweppes adding to its bot-tom line, and in the long run will result in utilisation of excess production capacity, making it one of the most

efficient manufacturers in the country.

Msipa said Schweppes had decided to stop exports at a time when the local market was vibrant, but that has since waned.

“We did not prioritise exporting at first because we were getting the US dollar from the local economy, and because the local market was very competitive markets in terms of what the custom-ers were expecting on pricing,” he said.

Although the local manufacturing sec-tor's average capacity utilisation has declined to below 40 percent, accord-ing to CZI figures, the beverages sector has been faring significantly better. •

Schweppes eyes Angola, DRC markets

AdM-DI156506-

BH24

7 NEWS

ZB Financial Holdings disposes of two properties

By Lynn Murahwa

Two ZB Financial Holdings companies have been let go by the group after low performance with no hope of clear sign of turning profits.

Addressing the group’s AGM Non-Ex-ecutive Director Tendai Mafunda said they decided to let go of ZB Securities and ZB Asset Management Company as they were consistently recording losses.

“Management recently decided to dis-pose the group’s stock broking unit, ZB

Securities and the asset management unit ZB Asset Management Company. Both Companies have been posting losses for some time and a return to profitability did not appear eminent for either company” he said.

He added that management has taken vital actions to cut costs.

“Management has embarked on a vig-orous cost cutting exercise while also attending to areas that enhance reve-nue inflows” he said. He said that the group has been faced with liquidity lim-itations resulting in constrained busi-

ness output. “Liquidity has remained a major challenge during the first half of the year, consequently business output has generally been constrained” said Mafunda.

The group saw a slight increase in its balance sheet as well as trading reve-nue, however a decline in overall out-turn.

“The group’s balance sheet has increased marginally by 2 percent as at the end of May 2014 from the levels achieved as at 31 December 2013.

“Trading revenue increased by 3 per-cent however a depressed outturn on the equity portfolio has had a signifi-cant negative impact on overall outturn to date with the result that the group is operating at slightly below breakeven level after accounting for the unrealised loss on investments” he said.

Mafunda said there has been marginal management in costs and currently performance is below targets.

“Costs have been managed at 2 per-cent below the 2013 levels and our performance as a group so far is below the operational targets.” said Mafunda. •

BH24

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BH24

The equities market lost for a third consecutive day in today's trades, going down 0.68 percent on the back of losses in a couple of heavyweights.

The industrial index closed the week lower at 187.08 points after shedding 1.29 points. Three counters traded in

the negative territory.

Giant telecoms, Econet traded 3.10 cents lower at 66.90 cents, while Edgars lost 0.70 cents to trade at 12.30 cents. Meikles eased 0.11 cents to 19.99 cents. On the upside, Fidelity Life led the movers as it gained 2 cents

to close at 10 cents whilst cement pro-ducer Lafarge and TA Holdings added a cent each to trade at 63 cents and 8 cents respectively.

Willdale went up 0.02 cents to 0.10 cents and Mash was marginally up by 0.01 cents to 2.42 cents. The industrial index retreated 0.32 points (or 0.17 percent) compared to week ending 20 June 2014.

The value of trades was improved slightly at $774K, on the back of trades in Delta, Dairiboard and Econet. The mining index was flat at 61.71 points as Bindura, Falgold, Hwange and Riozim all maintained previous trading levels. On a week-on-week basis the mining index added 2.71 points (or 4.59 percent). — BH24 Reporter •

10 ZSE REVIEW

Equities end week in the red

It is good that Government is now looking at how companies come up with their pricing models to come up with policies that will curb imports and help revive the industry.

The Minister of Industry and Com-merce told delegates at the Zimba-bwe National Chamber of Commerce congress yesterday that Cabinet had tasked him to carry out a comprehen-sive study into what constitutes the cost of production across all sectors.

The study will also include how com-panies in the region arrive at their own price structures.

Although the high production cost fac-tor has always been there for every-one to see, nothing has been done. Until now. That Government is going to act on it gives a boost of confidence to business and the consumers them-selves.

Among some of the positives from the economic reforms implemented in 2009 was the gradual return to profit-ability by local firms dependant on the domestic market.

However, the negative was, they could not meet demand and had to import to

fill in the deficit until Zimbabwe became a net importer of goods ranging from food stuffs to detergents.

Hence the need to protect local indus-tries. While Zimbabwe was reeling under the recession, the South African and other regional economies were steaming ahead unhindered and ben-efiting from the commodity shortages that characterised Zimbabwe. They could even afford to subsidise their companies so that they can export to Zimbabwe cheaply.

Price differentials between regional markets and Zimbabwe include costs such as transport, insurance and reasonable mark-ups which make it cheaper for people to shop from other markets, particularly South Africa. This also means that the local business sec-

tor will have to be competitive enough to stay in business, a situation which is very unlikely given the situation.

Now to continue exposing local com-panies, with their attended high cost and inefficient production structures, to highly efficient and low cost regional competition is tantamount to perpetu-ating the decade long de-industrialisa-tion.

As Government works on finding out how prices are being arrived at, it is crucial to also find out how it can be solved. We know that the problems contributing to the high costs of pro-duction range from shortage of elec-tricity, water, and raw materials which have to be imported from the same countries competing with local com-panies. We also know that revival of

the agricultural sector and reduction of import duty on raw material will help cut down the cost.

Once production is up, we need to sat-isfy demand so that the country desists from relying on imports. Imports should only compliment our own prod-ucts.

Zimbabwe needs a vibrant export mar-ket so that companies get more from their produce.

The study is way overdue so it should be carried out with haste so that we find a solution as soon as possible.

Though this Government initiative is exactly what industry needs, it remains to be seen how the industry itself will react. •

11 BH24 COMMENT

Imports restoration key to improving economy

BH24

Cabinet says it has noted the down-grading of South Africa by rating agencies, and says government will focus on implementing the National Development Plan to deal with the challenges.

Briefing journalists at the Imbizo Centre in Parliament on Thursday, Communications Minister Faith Muth-ambi, who led the briefing following the Cabinet meeting of 25 June, said government was alive to the growth challenges that the country faces.

“Government has prioritized the accelerated implementation of the National Development Plan, with

reforms that are aimed at unlocking South Africa’s growth potential.

“Government is committed to improving the regulatory environ-ment, reducing skills shortages and accelerating its infrastructure invest-ment programme as part of remov-ing obstacles that are constraining growth,” she said.

End of platinum mine strike

Muthambi said Cabinet noted that the five-month strike in the platinum belt had dire effects on workers, employ-ers and the economy as a whole.

The strike, which also led to the inter-vention of Mineral Resources Minister Ngoako Ramatlhodi, was cited as a major contributor by Stats SA when

Statistician-General Pali Lehohla recently announced that the gross domestic product (GDP) had con-tracted by 0.6% in the first quarter of 2014.

“While the right to strike is protected in our Constitution and labour laws, Cabinet appeals to both employers and the labour movement to resolve negotiations speedily and to avoid such prolonged strikes.

“The success of our development pro-grammes depends on a stable and thriving economy.

“As South Africans, we all have a responsibility to grow the country’s economy,” she said. ― SANews •

13 REGIONAL NEWS

SA cabinet to tackle economic downgrade concerns

enjoy the CAIO ride!

Minister Muthambi

14 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATSGen Station

27 June 2014

Energy

(Megawatts)

Hwange 509 MW

Kariba 750 MW

Harare 45 MW

Munyati 31 MW

Bulawayo 21 MW

Imports 170 MW

Total 1526 MW

30 June - TA Holdings 79th Annual General Meeting of the ordinary members Venue: Miti Room, Sango Conference Centre, Cresta Lodge, Harare, Time: 1400 hours

30 June - ZIMRE 16th Annual General Meeting of members, Venue: NICOZDIAMOND Auditorium, 7th Floor Insurance Centre, 30 Samora Machel Avenue, Time: 1230 hours

THE BH24 DIARY

BH24

16 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

FIDELITY LIFE 25.00% 10.00 EDGARS -5.38% 12.30

TA 14.28% 8.00 ECONET -4.42% 66.90

LAFARGE 1.61% 63.00 MEIKLES -0.54% 19.99

MASH 0.41% 2.42

IndicesINDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 188.37 188.07 -1.29 POINTS -0.68%

MINING 61.71 61.71 +0.00 POINTS +0.00%

Stocks Exchange

Previous

BH24

18 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,370.33 +2.46 +0.10% 25June

Kenya 4,856.35 +10.75 +0.22% 26June

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 41,729.59 -257.96 -0.61% 26June

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 188.37 -1.22 -0.64% 26June

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day —"OppOrtuni-ties multiply as they are seized." - sun tzu

Globalshareholder.com

BH24

Ukraine signed on Friday an historic free-trade agreement with the Euro-pean Union that has been at the heart of months of violence and upheaval in the country, drawing an immediate threat of "grave consequences" from Russia.

Georgia and Moldova signed similar deals, holding out the prospect of deep economic integration and unfettered access to the EU's 500 million citizens, but alarming Moscow which is con-cerned about losing influence over for-mer Soviet republics.

All three countries have made clear their ultimate goal is membership of the bloc but Brussels, under pressure from voters weary of further EU expan-sion, has made no promise it will allow them in.

Ukraine's former pro-Moscow Pres-ident Viktor Yanukovich turned his back on signing the EU agreement last November in favour of closer ties with Moscow, prompting months of street protests that eventually led to his flee-ing the country. Soon afterwards, Rus-sia annexed Ukraine's Crimea region,

drawing outrage and sanctions from the United States and EU, and pro-Rus-sian separatists began an uprising in eastern Ukraine that has claimed hun-dreds of lives.

"Over the last months, Ukraine paid the highest possible price to make her European dreams come true," Ukrain-ian President Petro Poroshenko told EU leaders at a signing ceremony in Brussels, calling it the most important

day for his country since independence from the crumbling Soviet Union in 1991.

Symbolically, he signed the agreement with the same pen that had been pre-pared for Yanukovich to sign the docu-ment last year.

Russia's Deputy Foreign Minister Grig-ory Karasin immediately said the sign-ing would have "grave consequences" for Ukraine, Interfax news agency

reported.

Sergei Glazyev, a senior adviser to Rus-sian President Vladimir Putin, described Ukraine on Thursday as a fascist regime, accusing EU leaders of creating a "Nazi Frankenstein".

However, Kremlin spokesman Dmitry Peskov was quoted on Friday by Inter-fax as saying Glazyev’s comments "do not reflect the official point of view". ―Reuters •

20 INTERNATIONAL NEWS

Ukraine signs trade agreement with EU

Mr Poroshenko

An opportunity has arisen to enable HelpAge Zimbabwe to facilitate the implementation of the Rural WASH project, to improve water, sanitation and hygiene in Bubi District

1. Carry out an assessment of the WASH related health risks and needs within - General Bookkeeping- Cash book and petty cash management the targeted population and make recommendations for actions which are - Order and control office stationery consistent with agreed guidelines and protocols. - Liaise with project staff in procurement and maintenance of project stocks

2. In conjunction with the local authority and relevant government departments records make recommendations regarding HelpAge Zimbabwe response to unmet - Preparation of Donor Financial reports needs. - Bank reconciliations

3. Facilitate the implementation of SafPHHE in conjunction with the WASH - Filing all office documentsofficer and/or other stakeholders. - Financial and programmes reports, vouchers, program and office meetings

4. Involve affected populations in assessment of the situation and in planning minutes activities and the design of water and sanitation facilities. - Monitoring and securing adherence to organization and donor administrative

5. Identification and training of ward based SafPHHE facilitators and health club processes facilitators. - General Office Administration

6. Write regular reports adhering to HelpAge Zimbabwe and donor reporting

formats as required.

- Degree in Accounting or equivalency and/or accounting

- Computer knowledge 1. Degree in Environmental Science or other relevant qualification

- Knowledge in Pastel/accounting package 2. Knowledge of public health and one or more other relevant areas (e.g. health

- Skills to manage own work and meet deadlines promotion, community development, education, community water supply).

- Clean Class 4 driver's licence 3. The post holder should have at least two years` practical experience in

appropriate community health programmes. 4. Experience and understanding of community mobilisation in relation to water

Send CV and an application letter to info@helpage.co.zwand sanitation activities. Deadline for application 30th June, 2014.5. Sensitivity to the needs and priorities of disadvantaged populations.

6. Demonstrated experience of integrating gender and diversity issues into public health promotion.

7. Good oral and written reporting skills. 8. Good communication skills and ability to work well in a team. 9. Ability to work well under pressure and in response to changing needs. 10. Ability to travel at short notice and to work under difficult circumstances 11. Good written and spoken English and Ndebele are essential.

2. Vacancy: Administration Assistant

Station: Bubi District

Key Result Areas Job Description

Qualifications and Person Specification

SKILLS AND COMPETENCIES

To Apply

- 2 years` experience in office administration

1. Vacancy: Participatory Health and Hygiene Education Officer

TLM-DI

159207

-T26

Two vacancies have arisen in HelpAge Zimbabwe.

BH24

By Carlos Lopes

....continued from yesterday

Many African governments spend a disproportionate amount of their scarce resources on procuring medicines. For instance, in 2006, Mali and Burundi, spent 2.3% and 2.9% of their GDP on such imports. Trends now indicate that new health challenges facing the con-tinent will generate for their demands. Non-communicable diseases, like heart disease, lung disorders, diabetes and cancer, are rising due to demographic and lifestyle changes. These conditions will account for half the deaths in Africa, surpassing those provoked by infec-tious disease.

An additional difficulty results from the excessive use of originator brands, with much higher prices than the low-est-priced generic equivalents. To add to this concoction, the poor quality of drugs and their regulation not only fuel illicit transactions but also contributes to health problems. It was not long ago that 64% of antimalarial drugs in Nige-ria were found to be counterfeit!

The benefits of scaling up local produc-tion of medicines

To pave a sustainable path for Africa’s health systems, scaling up pharma-ceutical production is essential. It can increase the share of population with access to vital medicines, including in rural areas at a lower cost. Better health is central for people’s opportu-nities and contributes for them to be more productive. The economic cost of disease is well known for families and the national economies. The direct and indirect impact of malaria alone is esti-mated at US $12 billion annual African income. Local production of medicines is possible and has become imperative.

With economic growth projected to keep growing and the continent pur-suing an agenda for economic trans-formation, there is a huge market opportunity. Local manufacturing would create modern jobs, stimulate economic activities and many ways increase productivity.

The pharmaceutical industry involves legal, scientific, technical, fiscal and

financial aspects. In order to step up their production capability, countries need to tackle challenges on a variety of fronts. These range from R&D and exploring the full utilization of the Trade Related Aspects of Intellectual Property Rights (TRIPS) flexibilities, tax and tar-iff policies, drug regulatory and regis-tration systems and, of course, building infrastructure.

In some pockets of the continent, pre-dominantly in North Africa and in South Africa, the status of local manufactur-ing of pharmaceutical products has gained a sturdy foothold. For example, Egypt and Tunisia produce, most of their national requirements for essen-tial medicines.

Morocco, the second largest African pharmaceutical producer, after South Africa, has 40 pharmaceutical indus-trial units supplying 70% of domestic demand and exporting 10% of their production, particularly to neighbour-ing African countries. Significant pro-duction capacity is being developed and enriched in Tanzania, Kenya, Uganda, Ethiopia, Ghana, and Nigeria.

Mozambique has just commissioned an ARV plant with the help of Brazil.

Africa hosts some of the leading global innovators and generic manufacturers. Starwin in Ghana, Saidal in Algeria, Uni-versal in Kenya, Aspen in South Africa, or Cipla in Nigeria are home grown manufacturers. This just demonstrates that Africa is producing medicines that meet international standards.

In order to enhance the pharmaceuti-cal industry, there is a need for fewer structures and harmonization of pol-icies through regional integration. Intra-Africa trade offers the prospect of strengthening and better exploiting regional supply chains and expanding economies of scale. This would also make larger investments attractive.

To be able to generate wealth and give its future generations a chance, Africa must take ownership of its health.

Carlos Lopes is the Executive Sec-retary of the Economic Commis-sion for Africa, headquartered in Addis Ababa, Ethiopia. •

22 ANALYSIS

Manufacturing pharmaceuticals: An untapped opportunity