Crop firm wilts under cash crunch
What you need to know:
Kilombero Plantations Limited general manager Graham Anderson confirms that the company has ceased operations in Tanzania after registering losses for three consecutive years, from 2016 to 2018
Morogoro. Rice and maize farming firm Kilombero Plantations Limited (KPL) has ceased operations in Tanzania after facing a financial crunch.
The company’s general manager, Mr Graham Anderson, said they are facing financial problems after the firm recorded losses for three consecutive years from 2016 to 2018 inclusive.
Mr Anderson mentioned other factors that led to ceasing production as including unfavourable weather and low maize prices.
“Low maize prices in 2017 and 2018 were one of the factors behind our closure. Also, inability to pay back borrowed funds is also ruining the reputation of the company,” he said.
In March this year, the company, which is a subsidiary of Agrica Ltd., a British company registered in the tax haven of Guernsey, obtained loans from several financial sources.
These included a $20 million loan from the US Overseas Private Investment Corporation (OPIC), and a $5.6 million loan from NMB Bank.
KPL – heralded as the “best in class” player in the field of socially-responsible agribusiness investments in Africa – received support from several development institutions, including Norfund, DfID, and the US-based Capricorn Investments, according to reliable sources.
However, he said there are some KPL shareholders who are willing to enable the company resume operations, and talks are ongoing with lenders to boost its finances.
The Kilombero Distric commissioner, Mr James Ihunyo, confirmed that he is aware of the company’s closure.
“It seems KPL is running bankrupt. So, we’ve held dialogue with the management over its employees benefits,” he said.
This is being experienced when thousands of villagers around the firm’s plantation claim that the firm dispossessed them of their land.
KPL’s fiasco follows a long list of failed big agriculture projects in Africa in recent years, including Agrisol and Sun Biofuels in Tanzania; Karuturi in Kenya and Ethiopia; Nile Trading in South Sudan; Senhuile in Senegal, and Bukanga Lonzo in the Democratic Republic of Congo.
