LUSAKA, Sept. 7 (Xinhua) -- The Zambian government has invested 16 million US dollars as equity finance in a palm oil production venture run by the country's largest agribusiness and food processing firm, the company said on Thursday.
The government has invested the funds in the Zampalm oil project through its investment arm, the Industrial Development Corporation (IDC), in a public-private partnership with Zambeef Products Plc, with the government now having a 90 percent stake in the project.
Jacob Mwanza, the company's chairman said a further 2 million dollars will be invested in the project over the next five years.
Under the agreement, the government-invested funds will result in the planting of an additional 900 hectares of palm and expand production with a modern 10 tons-per-hour self-powering palm oil mill to process fruit from the plantation situated in northern Zambia's Mpika district.
"Going forward, the aim is to develop the full potential of the 20,000 hectare plantation, of which 2,911 hectares is already planted, and build an out grower scheme for local farmers," he said in a statement.
Under the agreement, Zambeef will retain 10 percent shareholding in the project and will continue to supervise and develop it under a management contract.
Zampalm was incorporated in 2009 to provide a source of crude palm oil after the acquisition of another local edible oil processing firm.
According to the statement, the production and processing of crude palm oil was expected to drastically reduce the country's dependence on crude palm oil and edible oil imports, with current imports standing at 70 million dollars per year.
Currently, Zambia consumes about 120,000 tons of cooking oil but only produces 30-50 percent of total supply, with half of the country's oil consumption imported from the Far East, East Africa and South Africa.
Once at full capacity, the plantation will contribute to substituting 70,000 tons of cooking oil imported into Zambia.
