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The emperor’s fine invisible new clothes

“WE are two very good tailors and after many years of research we have invented an extraordinary method of weaving a cloth so light and fine that it looks invisible.

As a matter of fact it is invisible to anyone who is too stupid and incompetent to appreciate its quality.”  The captioned passage is derived from a popular fairy tale; Emperor’s New Clothes. 
It would appear that after roughly ten years or so Zimbabwean entities, in a snake like manner, shed their old skins and grow new ones. The technical or marketing term for such an exercise is re-branding.
In the past two years, a number of companies, particularly banks, have undergone an identity transformation. In some instances it involved newer Vision & Mission Statements, payoff lines and re-fashioned logos, whilst in other instances a name change was also undertaken.
Finhold changed its name and all collateral to ZB. All its subsidiaries, including the Intermarket Group, followed suit. FBCH, CBZH and Kingdom also undertook similar exercises. 
Another ZSE-listed company that has been recently re-branded is Circle Cement, now known as Larfage Cement.
 This new name reflects the majority ownership and control of the company which is held by the Lafarge Group of France.
Zimsun Ltd, which is now seeking to fulfill its dream of being a pan-African hotel management group, sought and was recently granted shareholder approval to change the name of the company to African Sun Ltd.
The rationale was that the new name appropriately captures the African dream which started off with acquisition of the The Grace Hotel in Rosebank in South Africa a couple of years back. The dream is now turning into a reality.
Next was FML, which formally changed its name to Afre Corporation. Afre is the short version of the name. In full it reads as Africa First ReNaissance.
The new identity besides showing that Africa is beckoning also highlights ReNaissance Financial Holdings’ control of the financial services group. 
Why do Zimbabwean companies feel the need for new clothes every now and then? For those aspiring to conquer Africa, the “Zim” part of the name is regarded as extra baggage that makes maneuvering difficult.
 Many pioneers, particularly the old Finhold which ventured into Botswana with the Zimbank brand, will attest to this fact.
 Even ABCH, which does not have a ‘Zimbabwe’ in its name, still apportions a fair amount of their lucklustre showing in Zambia to the “Zimbabwe Effect”.
Consequently most entities stepping into the region are doing so, after shedding the Zim in their names or taking up new ones altogether.
For instance, ZSR Corporation bought new clothes labeled as StarAfrica as it set its sights firmly on establishing its ‘star foot print’ in Africa.
However, for local shareholders the make-over does not immediately imply a change in the performance of the companies.
In fact, most of the things associated with the companies like reputation, business operations and management, besides business cards hardly change.
More like an old wine in a new bottle type of scenario and perhaps just as fruitless as the more normal reverse of this situation is said to be.
This week we look at the 12 months to December 31, 2007 financials of FML, now in a new frock as Afre.
 Total income amounted to $363,9 trillion, representing a 189 348% growth from the prior year. Firmly buttressing this performance was a 195 200% increase in investment income at $362 trillion.
Other income streams recorded rather unimpressive growth, with the core net written premium of $1,3 trillion having grown by a paltry 30 533%. 
Actuarial income of $75,7 billion was 145 658% higher than the $52 million attained in 2007.
Profits after tax of $301 trillion were realized with policyholders laying claim to $194 trillion, leaving shareholders with $71 trillion after stripping out minorities.
Of the $71 trillion, $6,6 trillion was derived from operations; $48,1 trillion was in the form of unrealized gains from equities and $16,6 trillion from gains on property investments.
Going forward, the group plans on attaining its pan African vision by using African Actuarial Consultants as the trailblazer.
Currently, the unit is working on mandates from the Zambia State Insurance and the Professional Insurance of Malawi.
 This regional adventure story line is not new.
It has been peddled since listing in 2003. That said, however, we have to give the new team now steering the Afre ship the benefit of the doubt.

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