ZAMBEEF SET TO CLEAR MORE FOREX DEBT

Government-backed stimulus package helps set the country’s largest retailer on growth trajectory

LUSAKA, ZAMBIA – Zambeef Products Plc is set to clear a significant slice of its external debt with the aid of a K220 million government-backed COVID-19 stimulus package signed with Absa Bank Zambia PLC today.

The drawdown will enable the retailing and agribusiness giant to repay a significant portion of its US-dollar denominated debt, in line with the company’s pledge to streamline its balance sheet and reduce exposure to foreign currency fluctuations. The group reported net debt of K1.1 billion as of March 31, 2021 and is expected to close at K714.8 million by the end of the financial year, explained Zambeef Chief Financial Officer Faith Mukutu.

“The facility will enabling us to support our growth goals and help ensure the long-term profitability of the group, which is a key player in the economy, accounting for 1 percent of GDP,” she added.

The stimulus package is part of government’s K10 billion effort to help cushion local businesses from the impact of the COVID-19 pandemic, which has had a negative effect on most local businesses. Late last year, the Government, through the Bank of Zambia, established a Targeted Medium-Term Refinancing Facility to provide short-term liquidity through commercial lending institutions such as Absa.

Zambeef’s retail revenue is primarily in local currency, while the cropping division’s revenues are US dollar-denominated, matching its input and capital expenditure currency.

Its long-term loans are provided by three local banks, along with German development bank DEG and the World Bank’s International Finance Corporation (IFC).

The Zambeef and Absa partnership event was graced by the Minister of Livestock and Fisheries Hon. Makozo Chikote MP and the Minister of Agriculture Hon. Reuben Mtolo Phiri MP. The Ministers commended the two organisations on the partnership that will help to foster growth in line with the Government’s agenda. They urged other organisations to follow Zambeef and Absa in driving growth in key sectors of the economy.

Speaking at the partnership event between Zambeef and Absa bank Zambia PLC Managing Director Mizinga Melu said, “We are extremely proud to see this agreement come to fruition. This deal is momentous because we go beyond short-term financing. As a Bank, we have always committed to playing a pivotal role in the Zambian economy by bringing possibilities to life for businesses in key economic sectors like Agriculture. This stimulus package agreement to the value of Two Hundred and Twenty Million Kwacha (ZMW 220,000,000) is concrete proof of our commitment.”

Meanwhile Zambeef Chief Executive Officer Walter Roodt commented that the success of the company would not be possible without Absa Zambia’s support.

“We are proud to say that Zambeef, being the largest vertically integrated agribusiness in Zambia – and one of the largest in the region – rose to the occasion in filling the gaps in the food supply chain that was created by COVID-19 restrictions. We have helped cushion Zambians from the full impact of the disruptions in the local and international food supply chains and our success would not have been possible without the unwavering support from partners like Absa Zambia.

“Consolidating their role as an all-weather friend, Absa has yet again come on board to help boost Zambia’s recovery efforts. We would like to pursue our vision for growth as the country’s largest agribusiness, unencumbered by large external debt. This facility will help the group free up valuable capital for the business’ expansion plans so we can continue to do what we do best: feed the nation.”