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Secretary for Agriculture Ringson Chitsiko (right) being shown the new packaging for Seed Co’s maize seed by managing director Mr Dennias Zaranyika

Happiness Zengeni Business Editor— 
SEED CO has concluded discussions with a foreign investor for the acquisition of a significant stake in Quton. Chief executive Morgan Nzwere said the investor, Indian company Mahyco will take up 60 percent shareholding in the company for $10 million. “The cotton seed business at present is a nightmare, just like the cotton industry in general. So we want to try to divest a significant stake out of it.

“We are trying to go beyond the indigenisation threshold. The ministry has shown that it is flexible. It has set certain conditions; they have to comply gradually over a certain period and that they help in vocational training for the various agricultural colleges.”

Mr Nzwere said the transaction will be completed by the end of September. He said since the transaction was below 10 percent of Seed Co’s value, the group would not go to the market with it.

Quton is the only cotton planting seed company in Zimbabwe. Its main role is breeding, processing and marketing cotton seed to largely smallholder farmers in the SADC region.

On the other capitalisation initiatives, Mr Nzwere said the second tranche of the equity from Limagrain totalling $27 million was expected before December. The French company would take up a 32 percent shareholding in the company.

“The partnership with Limagrain is going well and work on the five joint quick wins is progressing well. The new cash including for Quton will enable us to keep on operating”

He said from a research point of view, Limagrain will bring a lot of value.
“There are research processes going on at the moment to try to come up with stronger products for the market. So we will benefit more from research facilities, getting our breeders exposed to the international markets and technologies, sharing their gem traits. They also have modern state-of-the-art testing facilities”

On operations, Mr Nzwere told the annual general meeting that demand for winter cereals seed was flat with increases in wheat being offset by reduction in barley owing to the main customer Delta, holding carry-over stocks.

“The problems affecting winter cereal production in Zimbabwe remain, with sustainable winter cropping funding and reliable electricity for irrigation the major challenges.

He said seed deliveries were progressing well and current estimates are within targets. “The products had continued to outperform competition in independent trials.”

The group was in the process of re-branding its products across all markets with the new packaging difficult to replicate which is going to take fake seed producers out of the market while also increasing the product appeal to the consumer.