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Business Reporter
Bulawayo based confectionery company, Arenel, has suspended its US$6 million flour milling plant project after failing to secure Special Economic Zone status, people familiar with the development said.

Arenel, the producer of sweets and biscuits had sought the SEZ status to benefit from fiscal and non-fiscal incentives meant to attract investment.

“This was not granted because the company failed to qualify for the status. For now, the flour milling project is suspended but they will continue engaging (the authorities over the matter),” said an official close to deal that declined to be identified.

No official comment could be obtained from Arenel in Bulawayo yesterday.

The Government gazetted the Statutory Instrument (SI) 154 of 2018 in August 2018, bringing Special Economic Zones into full operation.

This SEZs are meant to attract investments as the country seeks to create jobs and increase exports.

Companies operating outside Special Economic Zones are subject to 25 percent corporate tax whereas those within the zones pay nothing for the first five years and 15 percent thereafter.

The tax rate remains the same for as long as a company continue to operate within the zones or unless Government policy changes.

Another incentive is that companies with SEZ status can import equipment duty free but must prove the equipment will be utilised in SEZs.

Some companies that have been granted the SEZ status include Surewin Pvt Ltd, Zimbabwe Iron Steel Company of Zimbabwe, ferrochrome producer Afrochine , Southpole Consulting, Lentsloane, Tradekings Zimbabwe, Ecosoft, Nkonyeni Agriculture and Bernard Development Corporation.

Arenel was hoping the milling plant would produce a special flour that the company requires to produce biscuits and pastas like spaghetti and macaroni. It also intended to supply the surplus to the local market.

The company was also looking at contracting farmers under a wheat out grower scheme to support the milling business.

Meanwhile the company is proceeding with its investments in carbonated soft drinks, pasta, jelly and bottle moulding plants. The soft drinks plant is expected to start operations during the last quarter.