Windfall for Schweppes workers

Business Reporter
BEVERAGES maker Schweppes Zimbabwe Ltd says it has paid just above US$500 000 in dividends to local shareholders, making it one of the first indigenised firms to reward shareholders. A local consortium, Waterton Investments, gained a controlling 51 percent shareholding in the country’s second largest beverages maker in 2009 and the company has on two occasions declared a dividend, managing director Mr Charles Msipa said.

A Share Employee Ownership Scheme owns 31 percent stake while the remainder is held by the executive management. Delta Corporation is the minority shareholder with 49 percent shareholding.

Zimbabwean indigenisation and empowerment laws require foreign-owned companies to turn over their majority shareholdings to indigenous black Zimbabweans.
“Since we localised the business in 2009, we managed to declare a dividend in 2010 and in May this year totalling US$1 million because we are operating profitably,” said Mr Msipa.

“We decided to forego dividends in 2011 because we wanted to install a new plant.
“But going forward, and with the nature of our business, we are confident that we remain profitable and continue sharing the profits . . . empowering our workers.”

Workers got their share of dividends amounting to more than US$300 000. Employee Share Ownership Trusts are one of the designated vehicles for broad-based participation in the implementation of indigenisation and economic empowerment programmes. This is in line with the broad-based economic empowerment thrust aimed at creating equitable development partnerships between employees and investors.

Some studies conclude that employee share ownership appears to increase productivity and profitability, and improve employees’ dedication and sense of ownership.
“The company will certainly benefit from renewed commitment from workers which has positive impact on productivity,” analyst Mr Gift Mugano said.

“For employees, the fact that they are shareholders, it therefore means that they stand to benefit from declaration of dividends if the company is profitable. As in the case of Schweppes, it is quite enlightening to note that the company took this route of empowerment.

“This is an international brand that has refused to be an island of wealth in a sea of poverty.
“So there is no doubt the company will remain profitable and it will get total support from all stakeholders as its operation has significant multiplier effect across the country. Families are happy, Government is happy and the general community is happy.”

With the liquidity constraints prevailing on the market, most companies are not declaring dividends and, instead, are concentrating on recapitalising and expanding operations.

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