The Coca Cola Company recently gave notice of its plans to terminate its bottling deals with Delta Corporation and its associate, Schweppes Zimbabwe Limited.
This comes after the regulatory approval of the $104 billion merger between Anheuser-Busch InBev NV/SA (AB InBev) and SABMiller Plc, which is also Delta’s largest single shareholder (It holds a 38% stake).
Delta is also 49 percent shareholder in Schweppes Zimbabwe.
According to a report in The Source, Delta has said that it is considering the impact of this decision but it doesn’t expect a change to its operations.
None of this doesn’t have anything to do with tech, except for the fact that Mutare Bottling Company, the other bottler of Coca-Cola products in Zimbabwe is owned by Econet Wireless Zimbabwe.
The mobile operator has a 69% stake in the company which it snapped up in 2007 as part of its diversification strategy.
Delta’s inability to address the market with Coca-Cola (which, to be clear, hasn’t been signed off as the final outcome) could be an opportunity for the mobile operator if it can secure distribution rights, expand capacity and in the process boost revenues from its ancillary investment.
As the local telecoms industry faces challenges that have resulted in a regular decline in revenue the one non-core asset that Econet once considered disposing five years ago could be the hedge that’s needed by the operator.
11 comments
None of this doesn’t have anything to do with tech””WRONG *Trump face on*
Tech z not all about telecoms only.. Mergers of companies like Delta (that employ tech) is also big tech news.. I wish u culd include this more on this site, but I just came to say that?.
*edit* didnt see e double negative there.. still cool
I guess you mistook the angle from which Techzim is coming from here. They were simply saying this dvpnt (Coca Cola & global beverages merger) is not directly a tech news. If Techzim was to publish every news tied to tech…..then you would be over whelmed with news on everything from……company closures…..Land reform…Zim Asset updates……almost every trending news has tech a aspect. By the way im not from TechZim but just a reader
KEEP POSTING GUYS…LOVE YOU U ALWAYS KIP US IN THE LOOP
How would Econet fund MBC’s expansion?
They can get a contractual agreement with Cola Cola, armed with that agreement, Econet can then approach banks looking for loan to expand MBC, its a standard business practise.
Or since they own Steward Bank, they can borrow depositors money to expand MBC over a period of time then return it with a interest. For example, they can tell depositors that if they keep over 200 dollars in their accounts and do not withdraw it for 6 months they can can an interest of 5%. As soon as the depositor agree, Steward bank can then withdraw that money and use it for MBC expansion
Stuff like this made this country broke… You simple cant boorrow depositors money and hope to repay them with 5% interest kkkkk
Banks worldwide always do this! Its just the teminology they change. What do you think happens to your money when you deposit it in your bank account. Do think it will be sitting there waiting for you to come back to withdraw it?
The bank will loan it out and charge interest wether you are agree to it or not, thus how banks make money. This becomes a problem when they loan it out to individuals who do not pay back because next time when you come back to withdraw your money, the bank will not have it even if they want to give you. This is what they call toxic loans
Steward Bank doesn’t have the capacity to loan out the amount of money that would be needed. The last expansion there was for $17m; and the expansion was to a level just enough to meet some (not even all) of the demand in the Eastern regions. If you look at Steward Bank’s current loan portfolio, you can tell they would not be able to raise enough capital, not for one client, even its owner.
I heard that Pepsi will be setting up shop in Zimbabwe hence cancelling contracts that have anything to do with Coca Cola, their biggest competitor….appears to be true that.
Come on guys, the costs of operating a bottling operation are peanuts compared to the cost of running a telecoms business. Econet has more than enough free cashflow to fund this if it wants to. Just compare Delta’s capex – It cost only US$12 million to set up an entirely new bottling plant from Germany a few years back. The entire Pepsi project by Varun is costing only US$30 million for the whole of Zim. Compare these amounts to the US$1 billion+ that Econet has spent on network equipment since dollarisation in 2009. And by the way, Econet doesn’t need a single cent from Steward Bank. They’ve actually given it a US$100 million to recapitalise it after they bought it. Not the other way round.