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Mr Richard Zirobwa

Long time Art Corporation chief executive Mr Richard Zirobwa is set to leave the company after a 13-year stint at the helm following his resignation with effect from July.

Mr Zirobwa, who has been at the helm of the diversified industrial concern with interest in the paper and packaging, stationery and battery manufacturing sectors, will soon leave the company after a mutual agreement to part.

Mr Zirobwa, an electrical engineer, will be replaced by current chief operating officer Mr Tapiwa Makombe who is also an electrical engineer.

The group has also reconstituted its board following the increase in shareholding by Taesung Chemical. Mr Moses Chindu, Bluetrack Investments (a Taesung subsidiary) corporate affairs director is the new chairman of the group.

Press announcements are expected to be made this week.

Mr Zirobwa recently steered the group through a successful capital raising by firstly identifying the Korean shareholder (Taesung) who made an investment towards upgrading equipment through a long-term facility.

Art has finished commissioning phase 1 of a $1,9 million plant upgrade which will cut production costs and enable the group to compete with cheap imports.

Under the upgrade, an equal amount of $750 000 was spent on Chloride and the Kadoma Paper mills while about $400 000 was invested in Eversharp.

The overall target of the recapitalisation programme is to improve quality of production at Eversharp, Chloride and Kadoma Paper Mills.

The funds ($1,9 million) are a draw down from the $18 million facility offered by Taesung Chemical Company Limited. Of that facility, $3 million will fund raw material purchases while $15 million will finance capital expenditure.

Mr Zirobwa also leaves the group after successfully raising $1,2 million working capital.

Initially Teasung and Mr Zirobwa had joint shareholding but ZSE requirements saw them split the stake after it had passed the required 35 percent needed to make an offer to minorities. After the split, Taesung went on to increase its stake to above 40 percent through the acquisition of the stake held by NSSA.

Mr Zirobwa, however, remains with a substantial shareholding in the business held through Basrum Investments.

Meanwhile, the group says it has managed to upgrade the quality of paper coming out of Kadoma Paper Mills following the commission of new equipment in December.

Management at the Kadoma plant said that after the realisation that the market trends were moving towards whiter paper, a decision had been made to curb the $200 000/year the unit would incur as returns.

“The volumes are now in whites even though the tinted paper we used to do for Softex could be used with low quality but much cheaper raw material.”

The first phase of the upgrade, which cost $750 000 was meant to improve the quality of the paper.

“So the first phase was to improve converting efficiencies. The second phase is to improve the whiteness at a similar cost.”

At present, operating capacity is at 87 percent.

“We are producing in line with demand although admittedly we had lost competitiveness due to poor quality.”

The second phase will be to increase throughput to about 19 tonnes/day from the current 15 tonnes. “This is where improvement in revenue will come from.”

The group, however, said raw material supply remained a challenge with the group resorting to costly South African imports at $400/tonne against $250 from the local market. — Wires.