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February 01, 2011

Canning plant mooted for Zambia's pineapple growing region

Varun Beverages Limited intends to set up a pineapple canning plant in Mwinilunga District, Commerce, Trade and Industry Minister Felix Mutati has said.

Mr. Mutati said in Lusaka that Zambia development Agency (ZDA) would soon week hold discussions with Varun Beverages Limited, producer of Pepsi and Mirinda carbonated drinks, on investmentplans to set up a canning plant in Mwinilunga.

The minister said the two parties were expected to discuss investment projections, incentive packagesincluding concessions, among other issues. The Government, he said, was working hard to attract investment in pineapple production and generate employment for the local people in Mwinilunga.

“Varun is interested in setting up a smaller concentrate plant (squeezing of the juice from fruits’ including the pineapple) and will be meeting with ZDA by the end of this week and discussion will begin early next week,” he said.

Varun Beverages Limited has invested US$40 million to establish a Pepsi bottling plant that would bring on line fruit juices from home-grown raw materials.

The modern plant which commenced production in September last year, has a production capacity of 500,000 cases of carbonated drinks per month and has employed more than 214 Zambians.

Mwinilunga has the highest potential for pineapple production in Zambia. A lot of pineapples produced in the region go to waste since the collapse of the pineapple processing plant in the 1990s.

In 1991/92 season, prior to the collapse of the pineapple factory, the total area cultivated was 1,421 hectares, with production of 11, 368 tonnes of pineapples.

Mr. Mutati said the Government has partnered with Lumwana Copper Mine under the Multi Facility Economic Zone (MFEZ) to attract investors set up a fruit canning factory in Solwezi District.

The Lumwana MFEZ under Lumwana Properties Development has an investment injection of $1.2 billion had its master plan completed.

The construction phase is expected to create about 13,000 jobs this year.

Mr. Mutati said Government had agreed to provide incentives while Lumwana would woo investors to the MFEZ.

The investors in MFEZs and industrial parks qualify for a number of concessions, among them zero per cent tax profits for a period of five years from the first year profits are made, for six to eight years only 50 per cent of the profit is taxed, for year nine and 10, 75 per cent of profit is taxed.

Others are zero per cent import duty rate on raw materials, capital goods, machinery including trucks and specialised vehicles for five years and deferment of Value added Tax (VAT) on machinery and equipment.

Mr. Mutati said the move would support economic development
in the manufacturing sector where value addition is being encouraged as opposed to exporting goods in raw form.

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