The three companies – SA’s Tongaat Hulett, global seed and chemical company Pioneer Hybrid Zimbabwe, and SA seed company Pannar Seed, which is 80% owned by DuPont Pioneer – were on Zanu-PF’s list of 19 foreign-owned firms that had allegedly failed to comply with the country’s indigenisation laws.
In terms of the Indigenisation and Economic Empowerment Act, foreign firms had to cede 51% of assets to Zimbabwean nationals by 1 January 2014 or face penalties, according to Zimbabwe’s News Day.
According to DuPont Pioneer spokesperson Barbra Sehlule Muzata, both Pioneer and Pannar were committed to complying with Zimbabwe’s indigenisation policy. “We are committed to principles of business ethics and lawful conduct in countries where we do business,” she said.
Zanu-PF has threatened to expropriate 10 000ha of leased land from Tongaat Hulett, whose Zimbabwe operations comprise 44 519ha sugarcane, for resettlement purposes.
Daniel Isaacs, an analyst at 36ONE Asset Management, said if Tongaat Hulett was to lose the land, the message sent would have more of a negative impact than the loss of the land itself.
“The question is really whether the 51% law is driven by a desire to give land back to the community or is driven by less magnanimous reasons,” said Isaacs.
Rather than cede 51% of the company to locals, Tongaat Hulett’s strategy appeared to be one of showing the Zimbabwe government the scale of its contribution to the socio-economic revival of the country, added Isaacs.
Tongaat Hulett CEO Peter Staude said in his interim report that at least 670 active indigenous private farmers, employing more than 5 600 people, supplied the company with 850 000t cane generating R616 million/year.
Twitter: @robynjoubert
