HomeBusiness DigestNew lease of life for Bonnezim

New lease of life for Bonnezim

Roadwin Chirara

STRUGGLING horticultural concern Bonnezim has received a new lease of life after it secured a five-year, 3 million euro contract for its sweet chilli produce.

ace=”Verdana, Arial, Helvetica, sans-serif”>The company was facing closure after failing to renew its previous supply contract of green beans to the European market.

Canada Malunga, the chief executive officer of the holding company, Murray & Roberts, said they were working on fulfilling the new supply contract.

He said the contract was a welcome development to the company division because of the increase in operational costs to sustain the agro unit.

“We have worked very hard to secure the contract, thus we are working flat out to meet our end of the bargain. As we speak, harvesting is taking place,” said Malunga.

Under the new deal, Bonnezim will supply 600 tonnes of sweet chilli to the European market.

“By the 7th of March we should have finished packing the produce and by May the produce should have crossed the borders to the market,” said Malunga.

Malunga said the deal was likely to work in favour of its ailing agro unit as the terms of the contract allowed the company to review the pricing and the tonnage to be exported after the first six months.

“The arrangement will remain profitable to the business unit because of the agreed reviews in pricing and tonnage to be supplied,” said Malunga.

The deal will help the company’s agro unit to recover from its $10 billion loss from the previous year as more revenue is generated from the new markets.

Malunga, however, said the company could face challenges of working capital to fulfil its set obligations.

He said the holding company had managed to secure a $13,5 billion funding at a rate of 65% per annum to allow the subsidiary to meet its contractual obligations.

“We don’t expect interest rates to be friendly in the future thus the company is putting in place measures to enable it to meet its obligations instead of being found in short position, leading to borrowing at unsustainable rates,” said Malunga.

He said in light of the problems faced by the agro-business unit, Murray & Roberts was not going to pay a dividend.

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