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INVESTORS INVITED FOR E20M SOFT DRINKS PROJECT

By SIFISO NHLABATSI | 2023-03-07

Directors of Ekwindla (Pty) Ltd have invited investors to be part of their E20 million soft drinks production project.

The company will be producing soft drinks that will go by the name Pola Cola, conveying the cooling effect of the soft drink. The directors have invited investors to make a contribution of E5 million equity which is equivalent to 25 per cent shareholding to the company.

Ekwindla is a wholly owned Swati company under the directorship of Thabiso Kunene and Gcina Dlamini both local businessmen.

The campany is located at the Matsapha Industrial Site. Kunene met with FINCORP board directors at the company’s premises on Friday where he gave them an update of the project stage. FINCORP issued a loan of E2.5 million to be used to acquire land and construct the factory for the project.

According to Kunene, initially the business had planned to operate on rented premises until they secured fixed premises.

He said, however after careful consideration and a cost benefit analysis, they found that it would make more business sense to invest for a long term, hence securing the funding for land, to incorporate their long term goal.

“The initial funding under rented premises option was obtained from FINCORP while the land was financed by FINCORP, the business faced some challenges in getting some components of the development done in accordance with the predetermined timelines and cost escalated, resulting in the project halting midway,” Kunene explained.

He said the effects of COVID-19 also compounded the challenges as movement of goods and services between Eswatini and the rest of the world was greatly affected, yet a part of the implementing team was to come from outside the country.

The director said upon completion of the structure, the company will have created a value of E20 million. He explained that this was in line with the value already created and the projected valuation per expert opinion.

The director disclosed that while the land was acquired for E1.2 million, this was a subsidised price as the valuation currently stood in excess of E3 million. Kunene said the land was appreciating at a fast pace with developments around the industrial area, which meant security was also improving at the same pace.

Explaining the current situation of the project, Kunene said steel had been erected on site with only 25 per cent of the roofing having been erected on the structure.

He added that the manufacturing plant was housed safely in a warehouse at Interfreight in Matsapha. “Ekwindla has two loans with both IDCE and FINCORP in respect of the purchase of machinery, equipment and part development of land, the loans with interest are now at (E6.08 million IDCE and E3.5 million FINCORP).

The interests for both financiers are secured through fixed property pledged by the directors, as well as commercial property acquired from the ministry of commerce in 2019,” Kunene stated. He explained that the current value of the pledged assets had increased over the last two years due to huge developments happening around the vicinity.

The directors indicated that they had made tremendous efforts in securing markets for the soft drinks locally. Kunene said a study made in April 2021 showed that Eswatini imported in excess of 200 million soft drinks annually.

Ekwindla according to the director is targeting eight per cent of the available market. He said to this end, Ekwindla had already secured markets with Ruchi, ok Foods, Massmart and Feedmaster who would distribute the product through Eswatini’s leading supermarkets. He said Feedmaster would also rent premises from Ekwindla once the factory was complete which would bring an additional rental income of E21 000.

Kunene also informed the FINCORP board of directors that Soda King was intending to buy from Ekwindla, once the business had started operating.

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