ZIMBABWE – COTTCO Holdings, a listed cotton procuring, processing, and marketing company plans to explore the edible oil market in Zimbabwe with an oil expression plant in Gokwe, Midlands.
The company revealed the plan during the release of an interim report for the trading period update for the 14 months to August 2023.
According to Cottco, the move is part of the company’s alignment with the Government’s rural transformation and development agenda.
Cottco indicated that the funds to kickstart the project had been availed while civil works were in progress.
The company anticipates the commission of the plant with the capacity of crushing 60 tonnes of cotton seed per day early next year.
“Commissioning of the plant is targeted for early 2024 and is expected to contribute to rural transformation and development,” said Ms. Eunice Mupanduki, the company secretary.
According to COTTCO, a recent survey showed that Zimbabwe uses 30 percent of locally grown cotton, and 70 percent is exported to textile mills around the world, thus failing to exploit a competitive advantage in the cotton value chain considering the country’s ability to grow the raw material.
In addition, the sector has been facing numerous challenges since the turn of the millennium, which has resulted in cotton being grown by small-scale farmers.
Poor prices and lack of support for crop cultivation have led to a decline in production, along with limited modernization and inadequate crop management.
As a result, there were multiple closures and downsizing of factories along the cotton value chain because most companies were unable to remain competitive.
However, Cottco revealed that during the current marketing season, Cottco has taken delivery of nearly 70,000 tonnes of cotton, translating to a 48 percent growth from 46,748 tonnes recorded in the same period last year.
According to Cottco, a total of US$15, 9 million has been paid to farmers with 32 percent expected to be cleared next month.
“Farmer morale improved following the 2021/2022 buying season, where they were paid 75 percent and received interest. This rekindled their interest in growing the crop.”
Ms. Mupanduki indicated that ginning had begun at all ginneries adding that the move resulted in 360,224 farmers being registered as compared to 294,202 growers in the previous season.