African markets

Zimbabwe: Tanganda Tea guns for VFEX after ZSE return

TANGANDA Tea Company Limited On Thursday, Managing Director Timothy Fennell outlined his vision for listing on the Victorian Foreign Currency Exchange (VFEX) as a tea producer returned to the Zimbabwe Stock Exchange (ZSE) after a 14-year hiatus.

Fennell told NewsDay Business after re-listing that Tanganda’s board opted for ZSE first, while studying liquidity trends on VFEX, a new exchange that began trading in October 2020, with only a few counters on board.

Caledonia Mining Corporation, Padenga Holdings Limited, Bindura Nickel Corporation and Seed Co International are the four companies currently trading their shares on VFEX.

They have a combined market capitalization of US$451.84 million.

Tanganda has been relisted after an unbundling process by its parent company, Meikles Limited, first announced in March 2021.

“It has been considered (listing on the VFEX) but the board has decided that for the time being we will stick to the current exchange. But, in the future, we might consider it,” Fennell told NewsDay Affairs after going back on sale on the ZSE.

He said Tanganda was looking to unlock shareholder value on the ZSE first, before considering a listing on the VFEX.

“One of the main goals of the whole exercise (ZSE re-listing) is to maximize and unlock shareholder value and of course grow,” Fennell said.

Tanganda was originally scheduled to be re-listed on the ZSE on December 9, 2021, but the plan was postponed as Meikles sought approval from the Zimbabwe Revenue Authority.

“Over the years, Tanganda has grown from a simple tea company to a diversified agricultural export business. To date, Tanganda has developed a large estate of macadamia nuts and avocados and has been the largest producer of both crops in Zimbabwe,” said ZSE President Caroline Sandura.

“Tanganda’s re-listing is testimony that there are practical and tangible benefits to being on an exchange like ours. Some of the benefits of listing include, but are not limited to, improved corporate status, a more liquid market for shareholders, the ability to attract and retain qualified employees, and better business relationships.

She said the Treasury’s continued support through incentives that made the ZSE the preferred exchange for secondary trading of financial securities was significant.

Tanganda currently holds a 65% market share in the Zimbabwean market and exports 72% of its products.

It is also the largest exporter of macadamia nuts and avocados in the country.

The company is divided into three operating divisions, namely the agriculture division, the beverage division and the corporate and administration division.

In the fiscal year ended March 31, 2021, Tanganda had total assets worth $5.1 billion.

Fennell said that depending on its performance in livestock, the company may consider setting up another company to focus on the livestock business as part of Tanganda’s growth strategy.

“We could create another company; we have to watch it. We already have a large division and if we create a new business to deal with livestock only or if we just have a business that falls under Tanganda, we will decide as we go,” he said.

“Of course today is the first day so there are still a lot of decisions to be made. We have a new board and we need their input on how they would require us to structure the together,” he said.

However, he said, while the company’s biggest export market was Zambia, it was focused on growing the South African market.