Ultimatum for tobacco contractors

April 28, 2022

LIVINGSTONE MARUFU

 

Tobacco merchants have given contractors up to May 15, 2022, to  repay loans or they will lose support, a development which will throw over 10,000 jobs on the line, Business Times can report.

Zimbabwe has 33 registered contractors. Out of this, only six are exporting companies with 27 companies being subcontracted by these big companies at a premium.

Some of the big tobacco exporting companies include Chinese firm Tianze Tobacco Company, Zimbabwe Leaf Tobacco, Mashonaland Tobacco  and Voedsel Tobacco International among others.

They are pushing small companies to pay their loans by May 15.

Failure to do so, they will be excommunicated triggering panic among indigenous players.

Dynamic Tobacco Merchants general manager  Kuda Saringo said the indigenous tobacco contractors were failing to grow due to stringent rules set by the tobacco exporters.

He said chances were that most of them will  close in the near future largely due to viability challenges if the authorities do not intervene.

“We have every reason to panic as the big boys [tobacco exporting companies] are on our backs. They have set mid-May as the deadline  for the full repayment of loans despite tobacco delivered in small volumes,” Saringo said.

“If tobacco merchants’ chill warning is anything to go by, over 15 contractors are going to close with 10 000 people going to lose their jobs in the process.”

Saringo urged the Tobacco Industry and Marketing Board (TIMB) to help in the direct funding of the local indigenous companies.

“We are living at the mercy of the big boys hence we will not grow. As small tobacco companies we are facing serious viability challenges as we are not able to operate in the next 10 months due to limited working capital caused by these debts,” Saringo said.

Agritrade Leaf Tobacco CEO, Cephas  Rukweza warned his company will not be able to repay the loans.

“We  (are) supposed to repay a loan of US$1m by May 15,2022. So far we have only sold around US$200 000 which means we may not be able to meet the deadline.

“Our contracted farmers are selling our tobacco to auction floors through other tobacco growers’ numbers and TIMB should come up with a system which checks whether one has grown or not as the majority of people with grower numbers are not farmers,” he said.

Rukweza said the tobacco growers can transport the golden leaf using the company’s bales but can be repackaged and resold to other floors.

TIMB vowed to fight side- marketing this year.

Rukweza said the farmers are so cunning that they will sell their bales without  trace of foul play.

This year the number of registered tobacco farmers fell 17% to 119 979 this year from 140 771 last year while the new farmers registrations plunged 224% to 529 from 1717.

 

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