FridgeMaster, which came into Zimbabwe a few years ago with a bang, is now planning to quit because “rampant inflation in Zimbabwe has significantly diminished disposable income reducing demand for refrigerators and freezers to the point where it is no longer viable for the company to continue manufacturing”.
The company, which is incorporated in Swaziland as Masterfridge Limited and is listed on both the Swaziland Stock Exchange and the Johannesburg Stock Exchange, had a difficult year in 1998 realising a loss of R62.1 million for the year ending June 1998. But it has since turned its fortunes around realising a profit of R391 000 in the six months to December.
According to its interim report for the six months to December, however, the Zimbabwean operation has failed to respond to the remedial action implemented by the company.
Masterfridge holds 60 percent of the shares in Masterfridge Zimbabwe. It would appear, according to a Business Herald report, that Delta Corporation owns the other 40 percent and is reported to be planning to dispose of its stake.
Masterfridge Zimbabwe is reported to have made a loss of R700 000 (about $4.5 million) in the six months to December, and the parent company says, “shareholders are seriously considering liquidation of the company”.
“Apart from the R700 000 loss already accounted for in interim results, losses arising from liquidation are likely to be minimal. The highly valuable plant and equipment will be transferred to the Swaziland factories, minimising the company’s loss on its initial investment”.