The Zambia Privatisation Agency is pleased to announce that the Minister of Finance, Honourable Ronald D S Penza, has signed the sale agreement with Mr Goodward Mulubwa of Luanshya for the sale of Luangwa Mill, a branch of Indeco Milling Limited. Mr Goodward Mulubwa is a Zambian national and is a Luanshya based businessman.
Luangwa Mill was sold at a price of K90 million. Mr Mulubwa has paid an initial deposit in the sum of K60 million being 67% of the purchase price. The balance of K30 million of the purchase price will be paid three months after signing the sale agreement.
In addition to the purchase consideration it is envisaged that Mr Mulubwa will invest a sum of about K235 million by way of capital expenditure in the next two years for rehabilitation of plant and equipment and for purchase of utility trucks.
The Luangwa Mill was commissioned in 1975. The Mill was closed since August 1994 due to financial problems faced by Indeco Milling and its workers have been on forced leave since then. The Mill's capacity was grossly under utilised in the past due to low demand in the area coupled with stiff competition from hammer mills.
The rated capacity of the Mill is 1.5 tonnes per hour, which would allow it on a three shift operation, 338 days a year, to process over 12,000 tonnes of maize per annum. The production level of mealie meal for the year ended 31 March 1994 was 103 tonnes.
Luangwa Mill was originally offered to the management buy-out (MBO) team of Luangwa early 1995 on the basis of a right of first refusal as approved by Cabinet. However, the MBO team failed to purchase the Mill and subsequently the Mill was offered in the open market on a competitive bid basis. The ZPA received four bids comprising Fidelis Mando and others, Mugaiwa Milling, Macheche Traders and Goodward Mulubwa.
Independent valuations were done by Deloitte & Touche for the business valuation and Property Partnership, M G Chilinda Associates for the asset valuations.
Mr Mulubwa plans to start operations soon and envisages to increase capacity utilisation to about 20% in year 1. The new owners have also pledged to continue contributing to Zambia's industrial development and intends to increase investment for the rehabilitation and replacement of the aged equipment and expand production capabilities of the Mill.
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