Further to that, with commodity prices determined to stay lower for longer, RioZim probably has one option to ensure it meets its obligations under the new terms and deliver a return to its shareholders. The company has to invest and lower its cost of production. This can be achieved by a combination of two things being bringing up to date its plant and equipment as well as ramping up production volumes to lower cost of production. The latter strategy is currently highly appealing in an industry where assets a cheaper due to widespread distress. It will thus not be surprising if we will see RioZim announcing huge capital expenditures to bring more efficient equipment or go on an acquisition rampage to increase its volumes. It is in the best interest of the company to invest in Zimbabwe with all the noise being made about capital shunning the country simply because a policy framework has created an environment that allows it.
ZAMCO has thus once more resurrected RioZim, but this time with desire and ability to expand and create jobs, generate more forex earnings, contribute to treasury and above all provide a decent return to its shareholders.
See also:
RioZim gets shareholder approval for Zamco deal
GEM RioZim Investments ups stake in RioZim
RioZim seeks $2.1 billion to build 1 400MW thermal power station
RioZim seeks $10 million to reopen Cam and Motor
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