HomeBusiness DigestVan Hoogstraten ‘pulls out of CFI’

Van Hoogstraten ‘pulls out of CFI’

BUSINESS tycoon Nicholas van Hoogstraten has reportedly moved part of his stake in agro-industrial group CFI Holdings into a nominee account.

Report by Our Staff Writer
Well-placed sources say Van Hoogstraten, also a shareholder in Rainbow Tourism Group and Hwange Colliery Company, moved over 10% of his shareholding to his EFE nominees.

He owns just over 14% of the group through various investment vehicles which include Messina Investments and Zimcor.

Although the change could be a temporary strategic move, the market is rife with speculation that the stake could have been off-loaded to a high-profile individual.

CFI continues to struggle, particularly with regards to financing. The group’s inability to attract appropriate funding has hamstrung the company’s efforts to re-tool its aged plant and equipment in the poultry business, while depressing capacity and hence efficiencies and margins across the business.

CFI requires more than US$20 million to recapitalise its operations. The company has been financing operations and new projects through disposal of non-core assets and loans secured primarily from PTA Bank.

To date, CFI has raised about US$4,3 million from the sale of non-core assets. It boasts a huge asset base compared to other listed companies.

The company, currently trading on a cautionary on the Zimbabwe Stock Exchange, has engaged potential investors to take up a 48% stake in its poultry business, Crest Poultry, and an agreement is expected to be reached before year-end.

It is widely believed that a South African-based businessman with old links to CFI is the front-runner for the business. The group said it had narrowed potential funding and technical partners to three.

The conglomerate is also talking to other strategic partners about investing in its retail arm, Farm & City and Victoria Foods.

Analysts say that access to cheaper and more stable long-term funding would help the business take advantage of volume growth at Agrifoods and Agrimix, while a lasting solution is required to plug the gap created by increased power outages at the hatcheries.

Analysts say low capacity utilisation at Crest and Suncrest leaves money on the table, adding rise to imports of poultry products into the country.


Addressing the funding issue and balancing the equation would leave Vetco in better stead and also leave Farm & City with improved performance since funding would be available to develop the supply chain and improve inventory holding capacity.

The problems in the flour milling unit at Victoria are largely exogenous with the only way management can reposition the business being importation of cheap flour rather than mill expensively.
Zimbabwe’s wheat growing industry has basically gone to the dogs, taking the milling industry with it.

CFI is also disposing of its Beira Grain Terminal and its 14% stake in Windmill.

CFI operates three divisions: poultry, specialised and retail.

Poultry includes animal health unit Vetco, Agrifoods and Agrimix and the poultry businesses Hubbard Zimbabwe, Glenara Estates, Crest Breeders and Suncrest Chickens. Specialised comprises milling and snack foods operation by Victoria Foods. The group operates Farm & City with branches around the country.

In the six months to March, turnover for the group was up 16% to US$55,4 million spurred by increased demand for hardware and agro-inputs in the retail division. Volumes in the poultry division were unchanged and the specialised division registered a decline in volume.

In terms of contribution, poultry put in 50%, specialised 13% and retail 37%.

The group reported a loss of US$1,24 million, which was worse than US$486 901 in the comparable period and a reduction from the US$4,51 million in 2011.

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