Post date: Jun 11, 2011 12:41:6 PM
PS International, a US trading company that specialises in agricultural commodities has entered into an investment deal worth 42 million US dollars with Zambia's Freshpikt Limited for tomato processing.
America's PS International and Zambia's Freshpikt Limited sign investment agreements worth 42 million US dollars under the African Growth Opportunity Act (AGOA).
LUSAKA, ZAMBIA (JUNE 09, 2011) REUTERS - Freshpikt Limited is a food processing and canning company which started operations last year following its acquisition of Zambia Horticultural Products Limited (Zamhort).
PS International's planned capital injection into Freshpikt is part of the new investment expected to be signed during the 10th African Growth and Opportunity Act (AGOA) forum underway Zambia's capital, Lusaka.
US trade representatives said the agreement illustrated President Barack Obama's plans to implement trade policies to help alleviate poverty.
The money will be invested between now and 2016 and Freshpikt is billed to become a giant in tomato production and processing beyond the southern African region.
Zambia is hosting the 10th AGOA forum under the theme, 'Enhanced trade through increased competitiveness, value addition and deeper regional integration'.
Commerce, Trade and Industry minister, Felix Mutati said deals like these signal a new turn in AGOA partnerships that involve investment and not just exporting to the US.
"What we have seen in research, 75 percent of the activities under AGOA are in trade and only around 25 percent is in investment. We are beginning to change that equation to put more investment and when the US invest it does not necessarily mean that we are going to export into the US. What it means is that if you can access a region that is equally important. At the end of the day it's the dollars you make from the investment," Mutati said.
Freshpikt plans to create over 2,000 job opportunities for Zambians as production capacity grows with new equipment expected to be installed from the US.
" "It is true that we may have two or three people coming from, you know, our partners but we expect also that when are at the maximum in terms of production we should have a minimum of 1000 you know, workers. So 99 percent of staff will be Zambian staff," said Chance Kabaghe, Freshpikt Zambia Managing Director.
"We are hoping that with the markets that we are looking at, that we can grow in the neighbourhood of maybe 24, 25 million dollars worth of tomatoes a year, that's just tomatoes alone. So that's the impact that we hope this joint venture has on the Zambian agriculture community," said David Morrow, from PS International who is the project manager for the Zambia joint venture.
Zambian private companies are expected to sign 12 business joint-venture partnerships with their counterparts from the US amounting to 100 million US dollars during the forum.
The US government intends to extend AGOA from 2015 to 2025 and African governments have been challenged to sustain the progress achieved so far if congress is to approve the extension.