HARARE, July 26 (The Source) – Olivine Industries said on Tuesday it will soon engage the United States’ Office of Foreign Assets Control (OFAC) to be removed from the sanctions list after its former parent firm, the Industrial Development Corporation of Zimbabwe (IDC) divested out of the manufacturing company.
IDC is on the US embargo list.
OFAC is tasked with administering and enforcing economic trade restrictions on individuals and companies that are on the United States sanctions list and has over time seized $1,9 million belonging to Olivine, on account of it being an IDC subsidiary.
Olivine Industries, a manufacturer of fast moving consumer goods such as cooking oil, soaps and margarine, says trading while under sanctions has been difficult and it is hopeful the changed circumstances will work in its favour.
Chairman Peter Madara told journalists the IDC had last month sold its remaining 1.4 percent shareholding in the firm to a local company called Tonmont Trading.
“IDC last month decided to divest and sell its 1.4 percent to a local company called Tonmont Trading and that transaction was concluded early this month,” Madara said.
“We therefore have changed circumstances and we are hoping to engage OFAC to see whether we can be taken off the OFAC list. When you are placed on the OFAC list, it makes it extremely difficult to trade, all the banks do not want to touch you.”
Government remains the top shareholder in Olivine with a 49.3 percent stake while SR Amando holds 34, 2 percent and Wilmar at 15.1 percent.
But Madara said the government stake did not matter on its bid to be removed from sanctions list.
“The government is not on sanctions,” he said.
Madara said Olivine has had to rely on the goodwill of other companies to import raw materials for its cooking oil business.
“If we are removed from OFAC list we will be able to buy from the open market because at the moment if we do, the money will be seized,” the Olivine chairman said.
He said the firm was currently re-investing in its operations as it seeks to reclaim lost market share.
As part of the initiatives, Olivine is investing $2,7 million in the setting up of a new soap plant.
“We are currently in the process of bringing in a new plant. We are getting this plant in three consignments, the first consignment arrived last month, the next will be here end of this month then the last will be here beginning of September,” he said.
“We will assemble the plant and we expect to start trial production by mid-December and we should be running full throttle in January 2017.”