Kawambwa Tea Company (KTC)has acquired a K6 billion boost from a loan from the Zambia National Commercial Bank PLC for recapitalization and to settle outstanding debts the firm owes including various government institutions.
This brings a total of K 8 Billion the firm owes the local bank from the K 2 billion loan the Tea company had acquired from the bank.
The firm which had ceased its operations for about a year due to non remittance of dues towards debts, recently resumed operations following the cash injection from the bank.
This came to light during a fact finding tour of the company at its Kawambwa estate by State House Chief Analyst for Policy implementation and monitoring (PIM) Tobias Mulimbika.
He was accompanied by Kawambwa District Commissioner Wilbroad Mumba and other officials,during a tour of the company yesterday.
The Kumar Holdings owned Kawambwa Tea Company (KTC) owes Zanaco K2 billion in arrears from a loan earlier obtained from the bank to help settle its previous Africa Development Bank (ADB) debts.
Management at the factory which was at pains to explain why the firm had stalled operations for over a year and had outstanding salary arrears for its 800workers earning between K210, 000 and K 370,000 respectively, explained that owing to its debts, the firm had struggled to cope with operational costs.
They said the bank sent a team of experts to assess the company’s viability before approving the loan and were satisfied with its potential.
But when further queried whether tea had no market and was not profitable, management said produced commodity had readily available market and was sold through legal channels refuting claims that the firm was selling on the black market.
They said the recovery plan was the best alternative for the company to sustain operations given the previous lack of ploughing back of proceeds for recapitalization and operational costs.
“We have been legally conducting our business despite owing various organizations because in the case of exports to neighboring DRC we raised export documents through Zambia Revenue Authority (ZRA) which is legal documentation, so this is against allegations that we have been trading on the black market,” said one of the Zambian KTC factory management staff.
Management at the factory said following the resuscitation of operations the company had projected a recovery plan which included an operational cost of K3bn which would generate an estimated K8bn from its 412 cultivated hectares of tea targeted to produce 900,000tonnes of processed tea.
They said the tea had readily available market from the local and international markets, such as the DRC and Kenya’s Anjeli Tea Auction floors, where it used to fair very well.
Kawambwa Tea Company has an estate covering over 2000hactares which has never experienced expansion of the cultivated hacterage.
The firm also owed other firms such as ZESCO K127million,NAPSA K255million,ZRA K598Million and accrued terminal benefits of K560million to its employees.
However, management said the company had started settling the debts after negotiating with the various creditors on repayment plans.
They said the firm was paying ZESCO K25million per two weeks and recently paid the electricity firm a K30million bringing the balance to about K60million and had settled outstanding council levy dues it had with the Kawambwa Local Authority.
Management also revealed that the company was paying NAPSA K50million per month under the arrangement while it was also committed to also pay ZRA K50million on a monthly basis to offset the accrued tax dues.
They said workers at the factory had started receiving their regular salaries which were being paid together with one month’s accrued salary arrears from the 11months dues the company owed them.
“Workers have started receiving their dues and what is happening is that a months pay is being given at the same time with an accrued salary from arrears as a way of knocking of outstanding salaries at the company,” said the management staff.
They also said the company had procured fertilizers for enhancing the yield of tea and protection gear for some workers which was yet to be given to all the sections.
And addressing the management at the Factory Mr. Mulimbika said Government was concerned with the problems that the company has faced for a long timedespite its potential to be sustainable and vibrant.
ZANIS/DN/ENDS/MM