ONE of the country’s leading manufacturers of detergents and foodstuffs, Olivine Industries, has ceased the production of cooking oil after the US g
overnment ordered them not to buy raw materials from ‘stolen’ farms, businessdigest established this week.
The processor of agro-products is a subsidiary of US food giant Heinz Group whose operations are monitored under the Zimbabwe Democracy and Economic Recovery Act passed in 2001. The Act discourages US firms or their subsidiaries from doing business with Zimbabwe until democracy is restored.
According to information gathered, the firm can no longer source raw materials such as soyabeans and cotton seed, the main ingredients in the manufacturing of cooking oil.
Section 4 of the Act directs the Secretary of the Treasury “to instruct US executive directors to multilateral development banks and international financial institutions to propose review of, the cancellation or reduction of indebtedness owed by, or the extension of loans, credit, or guarantees to, the Government of Zimbabwe (until) the President’s certification to the appropriate congressional committees that: (1) the rule of law has been restored in Zimbabwe; (2) certain election or pre-election conditions have been met; (3) the Government of Zimbabwe has demonstrated a commitment to an equitable, legal, and transparent land reform programme that is consistent with agreements reached at the International Donors’ Conference on Land Reform and Resettlement in Zimbabwe held in Harare, Zimbabwe, in September 1998”.
Under the Act Olivine, which is an American company, cannot buy raw materials from resettled farmers.
Companies and farms which have been doing business with Olivine were also warned against doing business with the American company.
Sources said government had since October 2001 been trying to localise Olivine and some of its subsidiaries but the American company was resisting.
The localisation involved employees and other local investors taking up a significant stake in the company.
Olivine chief executive Ian McKenzie referred all questions to the company’s commercial director, Phenias Chingono, who said he was not at liberty to discuss the issue yesterday.
Owing to the unavailability of raw materials, Olivine stopped manufacturing cooking oil two months ago as it faces critical shortage of soyabean and cottonseed, important components in the production of cooking oil.
The development has seen the commodity disappearing from shop shelves.