Zimbabwe government buys out H J Heinz''s stake in Olivine Industry
04 Sep 2007
The government of Zimbabwe has bought out leading food processor H J Heinz''s 49-per cent stake in Olivine Industries, which makes cooking oils, fats and soaps, for $6.8 million. Cottco, the state-controlled cotton buying and processing enterprise, will take control of the business.
Heinz has been present in Zimbabwe for more than 25 years, and one of the first foreign businesses to invest in the country after its independence in 1980.
Zimbabwe''s economy has been crippled by annual inflation raging at over 7,600 per cent.
In an effort to cope with the economic crisis, brought by the highest inflation in the world, the government has prohibited any future price rises and has frozen salaries for government employees. Businesses that are unable to reduce prices face the threat of nationalisation.
The company had been forced to reduce its output and focus on exports because of Zimbabwe''s worsening domestic situation.
The
country had enacted new laws to compel foreign-owned businesses
to divest a majority stake to black-owned Zimbabwean firms
that are due to come into force in some months, though
the Heinz stake sale had been under discussions prior
to this law.
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