Lilongwe Dairy eyes Dairibord takeover
One of the country’s dairy processors, Lilongwe Dairy (2001) Limited, is in discussion with Dairibord Malawi Limited (DML) for a possible takeover of its operations.
In a statement The Nation saw yesterday, the board and management of DML said the discussions follow the announcement by Dairibord Holdings Limited (DHL) that the company is a going concern.
“Significant progress on the transaction has been made and the parties are going through the motions to obtain compliance and regulatory approvals to finalise the transaction.
“Lilongwe Dairy [2001] Limited and DML remain committed to servicing all small-scale milk farmers and suppliers while ensuring little to no disruption in serving existing markets,” reads the statement in part.
DML corporate adviser Pistevo Capital director, Kudzanai Chiganze, while confirming the ongoing discussions yesterday, said temporary suspension of services will be necessary to pave the way for maintenance of plant and equipment.
DHL human resources and administration executive Gilbert Takabarasha confirmed the discussions yesterday, but said the company will be in a position to release details on the same later.
DHL company secretary Mercy Ndoro is quoted in the Zimbabwe Daily as having said Malawi is now regarded as a discontinued operation with the assets available for sale.
Ndoro said for the year ended December 31 2018, business posted a loss of $693 000 (about K508 million) which was an increase from the $594 000 (about K435 million) it incurred in 2017.
The decision left over 150 dairy farmers destitute as the company was collecting about 300 000 litres from nine milk bulking groups a month, which translated to an annual income of K612 million per year for the dairy farmers, according to the Malawi Milk Producers Association (Mmpa).
Mmpa national director Herbert Chagona saidon Monday that while the closure of the company means affected dairy farmers will now have to start looking for new markets, the situation could exert pressure on the remaining six milk processors which could as well negatively affect prices. n
