PHILLIMON MHLANGA
Beverages maker, Schweppes Zimbabwe’s fruit processing and juice blending unit, Beit Bridge Juicing, has scaled up production of its orange juice.
It is understood that Beit Bridge Juicing has also introduced day and night shifts to cope with the demand.
The development comes after Schweppes stopped producing its flagship cordial drink, Mazoe Orange Crush, after The Coca-Cola Company which supplies critical ingredients, cut off supplies due to an estimated US$10m debt.
Schweppes Zimbabwe’s commercial director, Unaiswi Nleya-Nyikadzino confirmed the increase in production at Beit Bridge Juicing, but refused to reveal the production capacity level.
“We usually don’t share production figures. But, our sister company (Beit Bridge Juicing) has been producing the fruit trade and has increased the capacity. But, I can’t share with you the figures,” she added.
Last week, Business Times reported that Schweppes has stopped producing Mazoe Orange Crush because of an estimated US$10m debt it owes to The Coca Coca Company.
Several local companies have been struggling to continue getting supplies of critical raw materials on credit from offshore suppliers due to the non-payment of legacy debts, also known as blocked funds, amounting to about US$1.2bn.
Off shore suppliers have threatened to cut supplies to Zimbabwean firms, and the majority of them are now demanding pre-payment until the legacy debts have been settled.
Charles Msipa, Schweppes managing director, yesterday confirmed the debt owed to Coca-Cola.
The RBZ disclosed that, starting from this month, it would issue financial instruments worth about US$1.2bn to local companies to balance their books. Then next year, the RBZ would start paying the international suppliers owed. The viability of several companies has been under serious threat as a result of legacy debts, denominated in foreign currency following far-reaching currency reforms by the government in June this year.
The debt burden has disturbed business and companies, which are now finding it difficult to borrow from offshore creditors and financiers. Most lenders across the world have now become risk-aversed when dealing with Zimbabwean companies. The debts have continued to weaken companies’ balance sheets and have become a hindrance to courting foreign investors.
Most investors demand clean balance sheets before extending the much-needed fresh international capital. Schweppes, which recently introduced a tomato business in Norton, is said to be struggling due to a plethora of challenges, including the influx of cheap imported products.
