Cairns Foods, a subsidiary of struggling manufacturer Cairns Holdings, has increased its capacity utilisation from as low as five percent in 2012 to 35 percent in 2015 as the food and beverages manufacturer seeks to bounce back to profitability, an official has said.
In July, the holding company’s shareholders and creditors voted in favour of its takeover by private equity firm, Takura Capital, allowing it to take over 63 percent of its shareholding previously held by the central bank.
Cairns, with debts that amounted to $25 million, was placed under provisional judicial management in 2012 and final judicial management in February 2013 due to insolvency. It voluntarily delisted from the bourse during the same year.
“I can safely say that we are in the right path, coming from a capacity utilisation that was as low as 5 percent as of December 2012 to 35 percent at present,” Cairns acting manager Jeremiah Kwenda said during a tour of the company by vice president Phelekezela Mphoko last week.
Kwenda attributed the recovery to a $1.5 million financial aid Cairns Holdings received in July 2013 under the Distressed Industries and Marginalised Areas Fund (Dimaf).
He said the fund was used to purchase equipment at Cairns Holdings subsidiaries in Harare, Marondera and Mutare where Cairns Foods is situated.
“We further used our own financial resources that we generated through sales of our products and I can safely say $800 000 was also used to acquire equipment. If we add that figure with the money also channelled from sales to buy spares and do repairs, we have invested over $1 million,” said Kwenda.
He added that the company’s workforce has more than doubled to 500 and that there are plans to purchase a new tomato processing plant.
Cairns is currently producing 50 000 cases of baked beans and jam per month.-The Source