Thursday, 24 October 2013

Nyabihu maize mill to be privatised afresh

1382650757n4The government will soon hand over Mukamira Maize Mill, popularly known as Maiserie, to a willing investor to revamp the plant.


In an e-mail to this paper, yesterday, Naphtal Kazoora, the head of assets and business management department at Rwanda Development Board, said the valuation exercise to determine the amount to be given to the former owners is in final stages.


The genesis


In 2004, government entered an agreement with Ruhengeri Catholic Diocese as a private investor to efficiently operate the factory for five years, before the latter would take it over permanently.


The investor was supposed to fully implement the business plan agreed upon by both parties with an underlying condition of boosting the economic welfare of the people within the environs.


However, according to Kazoora, the investors neither implemented the business plan, nor continued operations as planned, despite facilitation and guidance from various government agencies.


“We had to repossess the factory in public interest,” he said. “The problem was the investor’s failure to implement the business plan which was agreed upon by both parties during the time of privatisation.”


The factory, which was retaken by government last year, was set up to help improve maize growing in the country.


Farmers and cooperatives mainly from the districts of Nyabihu, Rubavu, Musanze and Gakenke used to supply hundreds of tonnes of maize to the factory.


“We used to supply to the factory over 250 tonnes of maize per season at a good price, but after it was closed, the market has been hard to come by, said Joseph Gafaranga, the president of Farmers Union known as Urugaga Imbaraga.


Kazoora said after the valuation exercise, there will be compensation of the immediate former owner, who will then surrender the property in their possession like land titles among others.


“This will facilitate government to resume a turnaround process with immediate effect,” he said.


‘More time’


Meanwhile, the diocese said government would have given them more time, because they had not failed to run the maize plant but were  rather given tough conditions.


“It was agreed that the diocese should efficiently manage the factory and in the event that that has not been done, warning letters would be issued and repossession would be the last resort. We received no warning letter until 2009,” said Theogene Niyibizi, the former director-general of the mill.


Niyibizi said problems began in 2009 when the Ministry of Trade and Industry, injected Rwf470 million as a loan to boost activities of the plant. The loan was given on condition that the factory could repay in six months.


“It was not possible for the factory to repay such a huge loan in a short period. That loan would also be paid with a 5 per cent interest; we asked for more time but in vain. Since then, we started receiving warning letters until we were stopped,” he said.


However, Kazoora said it was out of government’s generosity to award the loan to facilitate the plant to make an immediate turnaround of the business in order to achieve the intended results.


“Warning letters actually came after all other measures had failed to yield. We wanted results and government had done more than it was supposed to,” Kazoora said.


“Two warning letters were issued according to the privatisation guidelines, and many other correspondences, hence there was no option but to go ahead with repossession,” he added.


Kazoora also said the loan facility was extended to many other factories and they managed to pay back and made good progress, apart from Mukamira Maize Mill.



Nyabihu maize mill to be privatised afresh

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