BH24 is Zimbabwe's premium online business news platform published by Zimpapers (1980) Ltd.....

1. By Tawanda Musarurwa
HARARE – Government says
it is in the process of review-
ing the country’s Indus-
trial Development Policy
(IDP) and its accompanying
National Trade Policy (NTP),
which are set to expire at
end of the year.
The current appraisal of the
policies could benefit the
local manufacturing sector
and the country’s external
trade in view of indications
that the new policies will be
co-ordinated with investment
policies.
Director for enterprise
development in the Ministry
of Industry and Commerce
Mrs Florence Makombe said
review of the policies was
underway, but was not privy
to say when stakeholder con-
sultations would commence.
“In view of the coming to
an end of the Industrial
Development Policy as well
as the National Trade Policy
(2012 – 2016), the minis-
try is reviewing the policies
with a view to formulate new
investment policies for the
News Update as @ 1530 hours, Friday 13 May 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Govt reviews Industrial Development Policy

2. period 2017 – 2021,” she
said.
The current IDP has not been
successful if the current
manufacturing sector capac-
ity levels are anything to go
by.
When the current IDP was
promulgated in 2012, the
local manufacturing sec-
tor’s capacity utilisation was
circa 45 percent, and this
has worsened to 34,3 per-
cent last year, according to
Confederation of Zimbabwe
Industries (CZI) figures.
This was so despite some few
positive signs. The manu-
facturing sector managed
to reverse its fortunes after
contracting by 0,6 percent
and 5,1 percent in 2013 and
2014 respectively, to record-
ing a growth of 1,6 percent
in 2015.
Capacity utilisation however,
shed 2,2 percentage points
from 36,5 percent in 2014
to 34,3 percent. Observers
note that the factors affect-
ing industry and limiting
capacity in the manufactur-
ing sector remain unchanged
with industry players cit-
ing low domestic demand,
working capital constraints,
power outages, competition
from imports and antiquated
machinery and machinery
breakdowns as the primary
constraining factors.
The development of an
Industrial Development Pol-
icy is typically accompanied
by a Trade Policy insofar as
the former deals with the
productive capacities of an
economy, while the latter
determines strategies and
policies that facilitate their
exchange/trade.
And Zimbabwe’s external
trade has not fared much
better.
At the close of 2015, the
country’s exports were pro-
jected at $3,5 billion against
imports of $6,3 billion, giving
a trade deficit of $2,9 billion,
which worsened from a defi-
cit of $2,7 billion in 2014
Industrial efficiency, by and
large, calls for capacity utili-
sation levels in excess of 80
percent.●
2 news
Minister Mike Bimha

3. BH243

4. BH244

5. By Tawanda Musarurwa
HARARE -Agro-industrial
group, CFI Holdings says its
working capital situation has
eased following the success-
ful disposal of an 81 percent
stake of its Langford Estates
(Private) Limited - a property
investment company - for a
total consideration of $18
million through a debt for
land swap arrangement with
Fidelity Life Assurance.
CFI is also expecting to dis-
pose its remaining stake. Act-
ing group chairman Mrs Grace
Muradzikwa said the com-
pany expects this and other
transactions in the pipeline to
boost its capital base going
forward.
“With the resolution of the
$16 million local debt over-
hang burden, the board is
focused on strengthening its
capital base to stabilise the
group.
“The inflows from compensa-
tion for Saturday Retreat land
have begun accruing and are
being applied towards group
working capital requirements.
“This has significantly
assisted CFI to deal with crit-
ical working capital commit-
ments across the group,” she
said in statement accompany-
ing the firm’s delayed full-
year results.
“Furthermore, the group has
now secured interest for pur-
chase of the residual 19 per-
cent stake in Langford Estates
valued at $4, 3 million, 10
percent stake in Beira Grain
Terminal and some land banks
for $1, 9 million.
“The group still has undevel-
oped land in Harare South and
is pursuing disposal of this
land in order to capacitate the
various Group operations that
are in need of capital.
“A broader recapitalisation
process, including but not
limited to rights issue, is still
being pursued and members
will be advised in due course.”
The group has just published
its results for the year ended
September 30, 2015. And the
previous full-year results were
also delayed, published in
January.
Earlier in January, CFI was
suspended from the Zimba-
bwe Stock Exchange (ZSE) for
failing to publish its audited
financial statements for last
year, as well as to allow for
and investigations into trading
done during a closed period.
The group’s subsidiaries
include Agrifoods, Agrimix,
Crest Breeders International,
Suncrest, Farm&City Centre,
Vetco, Victoria Foods and
Maitland.
Meanwhile, for the FY2015,
CFI’s turnover from normal
trading for the year declined
by $66, 5 million from $71,1
million in the prior compara-
ble period.
The group incurred $0, 52
million (compared to $1 mil-
lion in 2014) in retrenchment
costs during the period.
Minus the retrenchments,
the firm posted an operating
loss before depreciation and
financing costs (EBITDA) of
$9, 96 million against a loss
of $6, 3 million in FY2014.
Financing at $2, 3 million for
the period were lower com-
pared to the prior year cost
of $4 million due to relief in
the last quarter resulting from
the debt resolution which was
effective June 30, 2015.
The group impaired deferred
tax assets amounting to $12,
9 million mainly in the Poultry
and Specialised divisions
resulting in a loss for the year
of $25, 1 million against $9, 9
million incurred in prior year
The board did not declare a
dividend for the period.
.●
CFI’s working capital situation improves
5 news

6. BH246

7. BH247

8. BH24 Reporter
HARARE-Tobacco farmers
have so far earned $172,4
million from the sale of 61,2
million kilogrammes of Virginia
tobacco since the tobacco
selling season began on March
30, latest Tobacco Industry and
Marketing Board (TIMB) statis-
tics show.
The 61,2 million kg of tobacco
were sold both on the auction
and contract floors.
The statistics show that a total
of 12,3 million kg of tobacco
worth $30,2 million was sold
at the auction floors while 48,8
million kg worth $142,1 million
was sold at the contract floors.
The mass of tobacco sold is 43
percent more than what was
sold during the comparable
period last year, and the value
has seen a 46 percent upturn
from last year.
A total of 42,8 million kg worth
$118 million had been sold
during the same period last
year.
The average price of tobacco at
auction floors is currently $2,
44 per kg while the contracted
crop is being bought at an
average price of $2, 91 per kg.
TIMB said the top price for the
contract floors was $6, 25 per
kg while at the auction floors it
was $4, 99 per kg. The lowest
price that has been recorded
so far is $0, 10 per kg.
A total of 46 435 bales have so
far been rejected due to poor
quality and poor packaging this
season, compared to 59 553
bales rejected the same period
last year.
Earlier indications were that
this season tobacco volumes
are expected to decline by
20 percent due to the El Nino
induced drought which affected
the crop, but selling trends at
both the auction and con-
tract floors reflect a potential
upturn.
The Reserve Bank of Zimbabwe
has since elevated tobacco
farmers to “corporate status”,
allowing them maximum with-
drawals of $10 000 a day.●
8 news
Tobacco farmers gross $172,4m

9. BH249

10. BH2410

11. HARARE -The local equities
market bounced back into
positive trading today after
two losses on the trot as the
mainstream industrial index
closed the week higher at
107.59 after adding 0.78.
Beverages giant Delta led
the gainers with a $0,0200
rise to trade at $0,7500,
while Old Mutual was up
$0,0050 to close at $2,2000
and Fidelity Life gained
$0,0010 to $0,1040.
On the downside, tele-
coms firm Econet was the
only counter in the red
after it lost $0,0050 to
close at $$0,2400. CBZ and
Padenga traded unchanged
at $0,1100 and $0,0750
respectively.
On a week-on-week basis,
the industrial index
increased by 0.56. The
Industrial index increased
by 0.56 points. The min-
ing index was unchanged at
21.55 as Bindura, Falgold,
Hwange and RioZim main-
tained previous price lev-
els at $0,0100, $0,0050,
$0,0300 and $0,1300 in that
order.
But on a week to week com-
parison, the mining index
gained 1.55
. - BH24 Reporter ●
ZSE11
Bourse bounces back to close on a high
02 03
ADD TO CART
Save big on selected
Products of your choice
PAYMENT
You can purchase
whenever, wherever
using:
DELIVERY
Spend $30 or more
on your purchases
and get free
delivery
01 Hello Convenience
www.hammerandtongues.com
BIG CONVENIENCE+
BIG SAVINGS+
BIG OPPORTUNITIES
= BIG HAPPINESS
SHOP ONLINE!!

12. BH2412

13. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
Delta 2.73 75.00 Econet -2.04 24.00
Fidelity Life 0.97 10.40
Old Mutual 0.22 220.00
Index Previous Today Move Change
Industrial 106.81 107.59 +0.78 points +0.73%
Mining 21.55 21.55 +0.00 points +0.00%
13 zse tables
ZSE
Indices
Stock Exchange
Previous
today

14. 14 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
12 May 2016
Energy
(Megawatts)
Hwange 323MW
Kariba 285 MW
Harare 30 MW
Munyati 33 MW
Bulawayo 0 MW
Imports 0 - 300 MW
Total 1245 MW
• 18 May - ZB Building Society AGM; Place: 21 Natal Road,
Avondale, Harare; Time: 12:00hrs
• 18 May - The 76th AGM of Astra Industries Limited; Place: Auditorium at Astra Park, Corner Ridgeway North/Northend
Roads, Highlands, Harare; Time: 12:00hrs
• 19 May - The Fifth Annual General Meeting of Padenga Holdings Limited; Place: Royal Harare Golf Club, 5th Street extension,
Harare; Time: 08.15am
• 19 May - NMBZ AGM; Place: Unity Court, Corner 1st Street Kwame Nkrumah Avenue; Time: 10:00am
• 19 May - Turnall Holdings AGM; Place: Jacaranda Room, Rainbow Towers; Time: 12:00
THE BH24 DIARY

15. JOHANNESBURG - South
Africa's manufacturing output
resumed its decline and min-
ing production contracted as
weak global demand pushed
the country's ailing economy
closer to a recession.
Manufacturing production
shrank 2 percent in March
and mining output plunged
by 18 percent - the most on
record - figures from Statis-
tics South Africa showed on
Thursday.
“The economy is very weak,
and with these set of figures,
we're looking at the possi-
bility of a contraction in the
first quarter,” said Dennis
Dykes, the chief economist at
Nedbank.
South Africa's economy grew
1,3 percent last year and 0,6
percent in the fourth quarter,
and in its February budget,
the National Treasury low-
ered its forecast for 2016 to
0,9 percent from 1,7 percent.
The International Monetary
Fund has cut its outlook for
2016 to 0,6 percent.
All three major ratings agen-
cies have cited weak growth
and policy upheavals as
major risks to South Africa's
investment-grade rating.
Last Friday, Moody's main-
tained the country's Baa2
rating, but with a negative
outlook. Fitch and Standard
& Poor's rate the country's
debt just one notch above
sub-investment grade and
are due to revisit the ratings
in June.
“You go back to brass tacks
and ask if government is
sending the right signals
when it comes to a stable
policy environment. But you
look at sectors like min-
ing and agriculture and the
policy environment there is
terrible,” Dykes said.
Last year, South Africa
recorded its lowest annual
rainfall since comprehensive
records began in 1904, as an
El Nino-driven drought ripped
through the region, putting
millions at risk of food short-
ages.
The government and min-
ing companies have been
deadlocked for years over
proposed changes to the Min-
ing Charter that will require
the companies to keep black
ownership at 26 percent.
South Africa, one of the
world's biggest metals pro-
ducers, has been hit by a
slide in commodities prices
that has come on top of
widespread labour unrest
among miners.
“We need to be cognisant
that our mining sector is
under pressure and that it's
a global theme,” said Elna
Moolman, an economist at
Maquire First Securities. “We
need to look for alternatives.
And given that we are very
strong in the services, this
is an area we need to focus
on.”
Moolman said an increased
focus on tourism, which has
already benefited from a
weaker currency, and upping
the export financial and
business services would help
lift the economy. – IOL/
Reuters●
regioNAL News15
South Africa: Recession fears resurface after mining data

16. Three bankruptcies this week
shows that $45 a barrel
oil isn’t enough to rescue
energy companies on the
verge of collapse.
Since the start of 2015,
130 North American oil and
gas producers and service
companies have filed for
bankruptcy owing almost $44
billion, according to law firm
Haynes & Boone. The tally
doesn’t include Chaparral
Energy Inc., Penn Virginia
Corp. and Linn Energy LLC,
which filed for bankruptcy
this week owing more than
$11 billion combined.
At least four more oil and
gas companies owing more
than $8 billion are nearing
default, including Breitburn
Energy Partners LP and San-
dRidge Energy Inc. Bank-
ruptcies have accelerated as
cash-starved companies find
it almost impossible to raise
capital. Energy companies
have been virtually shut out
of the high-yield bond mar-
kets, banks are cutting credit
lines and asset sales have
slowed.
"I don’t think the E&P model
in North America is eco-
nomic and I don’t think it
was real economic even
at $80 and $100 oil," Jim
Chanos, Kynikos Associates
founder and president, said
in an Bloomberg TV interview
Thursday. "It’s certainly not
economic at $45 oil
Several more are struggling
to sustain crippling debt
loads. SandRidge Energy,
which owes $4,13 billion,
said in its annual finan-
cial report that auditors
have raised doubts about
its ability to stay in busi-
ness. It delayed releasing
its first-quarter results,
citing ongoing discussions
with creditors on a “poten-
tial comprehensive restruc-
turing transaction.” Breit-
burn, which owes $3 billion,
missed interest payments
in April and is in talks with
creditors.
W&T Offshore Inc. owes
almost $1,5 billion and is
overdrawn on its credit
line, which was cut to $150
million from $350 million
in March. The company has
said it will pay off the loan in
three monthly installments.
Connacher Oil and Gas Ltd.
has told creditors it’s mak-
ing preparations to file for
bankruptcy as it continues
to search for a way to stave
off default, according to
two people familiar with the
matter.
Lisa Elliott, an outside
spokeswoman for W&T,
declined to comment on
whether the company is
nearing default. David Kim-
mel, a spokesman for San-
dRidge, did not immediately
return phone and e-mail
messages seeking comment.
Voicemails left with the
investor relations depart-
ments at Breitburn and Con-
nacher were not immediately
returned. - Bloomberg●
internatioNAL News16
Oil at $45 a barrel proving no savior as bankruptcies pile up

17. By Frik Els
Already high bankruptcy and
default rates in mining &
metals and oil & gas will only
accelerate this year and the
prolonged downturn in com-
modities will increasingly spill
over into other sectors.
So says Moody's Inves-
tors Service in a new report
which forecasts global spec-
ulative-grade (sometimes
called junk) default rates will
continue to rise this year, to
reach 5 percent in November
due to continued stress in the
commodity sectors.
Thereafter, it will stabilise in
the range of 4,5 percent to
5 percent through April 2017
says the ratings agency.
"We expect the oil price
slump to continue to place
upward pressure on corporate
defaults," said Sharon Ou, a
Moody's Vice President and
Senior Credit Officer. "None-
theless, high-yield spreads
have tightened noticeably in
the past two months, signal-
ling that the default rate could
taper off next year."
In the US, the default rate
among metals and mining
companies is forecast to climb
to 11,5 percent
In the US the rate of
bankruptcies, distressed
exchanges, missed payments
and chapter 11s will reach
6,2 percent. The default rate
among speculative-grade
Moody's-rated metals and
mining companies is forecast
to climb to 11,5 percent, and
for oil and gas companies
to increase to 10,3 percent.
Earlier this year Moody's
predicted an overall default
rate among speculative and
investment grade issuers of
more than 7 percent.
In January, Moody's embarked
on a sector-wide review of the
87 global mining majors that it
covers including entities such
as Chile's Codelco, Kazakh-
stan's Kazatomprom, Russia's
Alrosa and China's Minmetals
which enjoy the financial back-
ing of the state.
By the end of the April 34
companies had their debt rat-
ings axed including marquee
names like Rio Tinto, BHP
Billiton (down two notches),
Goldcorp and Codelco. A num-
ber also lost their investment
grade rating for the first time
such as Anglo American and
Vale, both down three notches.
Vale Canada were cut deep
into junk territory after being
downgraded a full five notches
in February.
Only 19 have retained an
investment grading. Of the 23
remaining companies under
review a number are in the
so-called crossover zone
between investment grade and
junk status. Mining’s worst
ever years going back to 1970
was 1986 when nearly one in
five issuers defaulted on debt
Already 46 defaults were
recorded in the first four
months of 2016, 17 more
than January through April
last year. Of these 18 of these
in the oil and gas sector and
nine in metals and mining,
most notably Peabody Energy,
the world's largest listed coal
miner which declared bank-
ruptcy on $3,7 billion of loans
and bonds in April.
2015 saw close to a doubling
of companies defaulting on
corporate bonds or loans com-
pared to 2014 with the total
jumping to $97,9 billion. Oil &
gas accounted for 32 percent
of all defaults and metals &
mining around 14 percent, the
second biggest contributor
among non-financial sectors.
The default rate among all
issuers in mining and metals
at the height of the global
financial crisis in 2009 was
9,4 percent, which inciden-
tally was followed by a zero
defaults during the following
two years.
Mining’s worst ever years
going back to 1970 was 1986
when nearly one in five issuers
defaulted on debt followed by
2001 when defaults reached
13,5 percent. The average
between 1983 and 2015 is
less than 3 percent. – Mining.
com ●
17 analysis17 analysis
Miners going broke – worst still to come