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 Sebastian Kopulande of Lusaka, for the sale of the Lusaka Door Factory of Zambia Steel & Building Supplies Limited (ZSBS).
Mr Kopulande is a Zambian national and has experience in the wood products industry, having been both a founder and Chief Executive of Setrec Manufacturing Limited of Ndola.
The ZPA has privatised the Lusaka Door Factory through the sale of its undertakings and assets for US$250,000-00 (Two Hundred and Fifty Thousand United States Dollars) on deferred payments.
An initial deposit of US$25,000-00 (Twenty Five Thousand United States Dollars) being 10% of the purchase price, has been paid. Mr Kopulande will pay the balance of US$225,000-00 (Two Hundred and Twenty Five Thousand United States Dollars) or 90% of the purchase price, over a period of two years.
Most important of the objectives regarding privatisation of the Lusaka Door Factory was to ensure future viability of the factory and to reduce government financial burden. To resuscitate operations at the factory, Mr Kopulande plans to acquire more modern equipment from South Africa and rehabilitate the existing machinery at the factory.
This has been estimated to cost about US$107,000-00. Mr Kopulande also plans to invest in motor vehicles for the factory, office equipment and furniture at a cost of US$115,400-00.
The Zambia Steel & Building Supplies Limited (ZSBS) was incorporated as a limited liability in 1969. The company was formed when four companies namely Timber Merchants of Zambia, Glass Suppliers of Zambia, Steel Suppliers of Zambia and Hardware Merchants of Zambia were nationalised and merged.
ZSBS carried on its business under two broad units, the Manufacturing Unit comprising two plants based in Lusaka and Kitwe and the Trading Unit comprising sales outlets in Kitwe, Ndola, Lusaka, Chipata and Livingstone.
The Door Factory based in Lusaka was the smaller of the two manufacturing units. The factory produced flush doors, hardwood doors, coffins and furniture. The factory is located in the light industrial area of Lusaka about two kilometres from the city centre.
The production volumes of the factory started displaying a downward trend in 1993 due to working capital constraints, change of materials used in the manufacture of coffins from blockboard to plywood which was more time consuming to use, and the bulk of flush door manufacturing was transferred to the manufacturing unit in Kitwe in 1994.
The ZPA considered liquidating ZSBS but decided to restructure the company and sell off the different units as separate legal entities. The ZPA used the sale proceeds to pay redundancy packages to the 22 employees who did not consent to continue with the new company. Out of the total workforce of 30 employees only six consented to continue with the new company.
Mr Kopulande will train his staff in the operation of the new equipment acquired. He plans to expand the product range of the company to include school desks, tables and chairs, office furniture, household furniture and industrial construction of wood products for the local and export markets. New products will include skirting, cornice, parquet flooring, cover strips, and door and window frames.
The company will adopt a new marketing strategy; it will go out to the people and educate them by carrying out product awareness campaigns. This is expected to result in an increased factory capacity utilisation from less than 10% capacity to not less than 75% capacity.
The market share is planned to increase to at least 20% market share. The number and quality of staff at the New Door Factory will be increased significantly to about 40.
Experienced and versatile personnel including a Managing Director, Marketing Manager, sales staff and Accountant will be hired to complement these.
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