ZIMBABWE – Bakhresa Zimbabwe is now at liberty to operate locally as Blue-Ribbon Industries (BRI) after meeting all the conditions set by the Commission Tariff Commission (CTC) during the acquisition bid seven years ago.
Blue Ribbon and its subsidiaries were placed under judicial management in 2012 and the merger was the judicial manager’s strategy to save the ailing business.
Bakhresa took over Blue Ribbon and all its subsidiaries in January 2016 and invested US$20 million towards the resuscitation of the company. Bakhresa Zimbabwe is owned by a Tanzanian family-owned multinational company, the Bakhresa Group.
However, the CTC conditionally approved Bakhresa’s acquisition of Blue Ribbon after concerns were raised during the assessment of the acquisition bid, resulting in the deal being approved subject to certain conditions being met.
CTC is required in terms of Compliance Monitoring Guidelines and Section 33(5) of the Competition Act to periodically undertake compliance monitoring investigations to ascertain the merging parties’ compliance with imposed conditions.
For Blue Ribbon, some stakeholders raised competition concerns concerning the possibility of the merged entity engaging in discriminatory conduct as far as procurement of packaging material and supply of flour is concerned.
It was further established that there was a possibility of the merged entity refusing to deal with local suppliers of wheat and maize.
Upon approving the deal CTC said, “At least 80 percent of the wheat and maize products to be sold and utilised by the merged entity (Bakhresa Zimbabwe), all its subsidiaries and its successors in title, shall be produced in Zimbabwe”.
The commission said Bakhresa Zimbabwe should utilize at least 50 percent of locally produced raw materials, including wheat, maize, and packaging, subject to the availability of such raw materials while all of the company subsidiaries and successors, would be mandated to supply all its products to all customers on non-discriminatory terms and conditions.
Bakhresa meets all the conditions
In its periodic assessment, CTC found that none of the products were being produced by any of Bakhresa Zimbabwe’s sister companies in Tanzania.
The commission also noted that to guarantee continued production of flour in Zimbabwe, a new flour milling plant was installed at Blue Ribbon’s Msasa plant and the company’s maize milling plants in Harare and Bulawayo were also operational.
Bakhresa Zimbabwe is thus using locally produced maize, wheat, and packaging in its operations to the satisfaction of the commission. According to the Grain Marketing Board (GMB), Bakhresa Zimbabwe has been consistent in procuring both maize and wheat from the local market.
“From GMB’s statistics, Bakhresa Zimbabwe procures an average of 50 percent of its total production requirements of both maize and wheat from GMB. However, the balance is supplied by other local farmers,” the commission noted.
The CTC added that the top five customers of Blue Ribbon that were consulted, all stated that they never had challenges in their trading with Bakhresa Zimbabwe, to the extent that some of them had arrangements with the entity that were negotiated and agreed upon with individual customers.
“Based on information gathered during investigations, it can be concluded that Bakhresa Zimbabwe is complying with the conditions of approval.”
Regarding the relevance of the conditions, the commission concluded that the conditions are still relevant and should be maintained as long as Bakhresa Zimbabwe remains a subsidiary of the Bakhresa Group.”
The group Bakhresa is a diversified food manufacturing company, involved in maize and wheat milling, bread making, confectionery, beverages, logistics and freight, marine transport, and real estate. It has operations in nine African countries.
For all the latest grains industry news from Africa, the Middle East, and the World, subscribe to our weekly NEWSLETTERS, follow us on LinkedIn, and subscribe to our YouTube channel.
