The Zambia Privatisation Agency is pleased to announce that the Minister of Finance Honourable R D S Penza has signed the sales agreement with Mr Webster Chikwanda Musukwa a Zambian individual based in Lusaka.
The sale of Zambia Pork Products Limited provides another testimony to the continued Zambian participation in the Privatisation programme.
The purchase consideration for the company is K 500 million broken down as follows. Mr Musukwa has paid K100 million to the Zambia Privatisation Agency to the credit of the Zambia Privatisation Revenue account at the signature of the sales agreement and will pay K200 million within six months. In addition Mr Musukwa will take on up to K200 million accrued employee benefits. All the employees have been retained.
Mr Musukwa plans to invest up to US $ 1,215,000.00 in the first two years in modernising, rehabilitation of the plant and computerisation of the information system. He also plans to diversify into a wider range of pork products.
Zambia Pork Products Limited was established as a parastatal company in 1971 after the Government of the Republic of Zambia purchased Colcom Products ( Zambia) Limited a subsidiary of Colcom Products of the then Southern Rhodesia.
In 1989, the company was established as a self management enterprise, after the Self Management Enterprises Act, 1988 was passed. The Act provided for, among other things a quasi socialist organisation structure where employees were supposed to manage their own firm.
It provided for a board of directors elected by employees. The company was originally established with two units, one in Lusaka and the other in Kitwe. The Kitwe unit was disposed off.
Zambia Pork Products was re- incorporated as a limited liability company in 1995 after the repeal of the Self Management Act No 33 of 1988.
Production at ZAPP stopped late in May 1995 primarily because of liquidity problems. Production commenced in April 1996 when the Zambia Privatisation Agency gave Mr Musukwa a management control contract to manage the firm on its behalf. We are happy to note that the company is now operating at 55 capacity, which is better capacity than the 8 capacity it was operating on two years before production ground to a halt.
As part of the transparency procedures laid down in the Privatisation Act 1992 and the Zambia Privatisation Agency Board, the negotiation of the transaction was undertaken by an independent chairman and lawyer with the support of Zambia Privatisation Agency technical personnel.
The Chairman of the Independent Negotiation Team was Mr Patrick D Chisanga of Muchanga Investments while the lawyer was Mr Mutila Mulenga of M Mulenga and Company.
The negotiation framework relied on the asset valuations undertaken by Messrs R M Fumbeshi & co for the company' properties and chattels and Messrs Richard Ellis of Zimbabwe for the plant and machinery. No earnings valuations were undertaken because the plant had been closed and there was no basis for conducting an earnings valuation.
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