12bn/- loan to raise Tanga Fresh fortunes

SOURCE: Daily news online

TANZANIA-Tanga Fresh Limited, one of the country’s leading milk processing companies, is set to secure a 12 billion/- loan within the next one month, after repossessing its confiscated title deed following President John Magufuli’s order.

It was the outcome of his intervention in a five-year wrangle featuring Tanzania Revenue Authority (TRA), Azania Company and Tanga Fresh Limited. TRA had confiscated the title deed, demanding settlement of the outstanding 1.2bn/- capital gains tax.

It subsequently emerged, however, that Azania Company sold the industry to Tanga Fresh Limited before clearing outstanding capital gains tax to TRA. During his recent tour of Tanga Region, one of the highlights of which was laying a foundation stone for the company’s expansion, Dr Magufuli was visibly upset by the protracted wrangle.

He gave a five day-ultimatum to the Regional Commissioner(RC), Mr Martine Shigela and TRA, to give the title deed back to Tanga Fresh, to enable it use it as collateral for accessing loans for developing the company.

“I give you until Friday next week to give back the title deed … Tanga Fresh should not be punished over wrongdoing that it didn’t commit,” Dr Magufuli remarked in his August 6, 2017 order. RC Shigela said the President’s directive was implemented after three days of its issuance.

Speaking with the ‘Daily News’ yesterday, Tanga Fresh General Manager Michael Karata said repossession of the document had enabled them to process loans amounting to 11.9bn/-, from two sources of funds for the company’s expansion projects.

The two lenders are Dutch Oak Tree Foundation (DOTF) which will provide about 4.6 billion/- and NMB Bank will disburse the remaining 7.3bn/ “Within the next one to two months, we will have acquired the funds, thereby putting us in a good position to resume the implementation of the pending projects for the company’s expansion,” he said.

He noted that so far, the DOTF had disbursed part of the loan (about 1.6bn/-) and NMB gave 50 per cent of the sought amount. He said the company was grateful for the President’s visit and his swift decision to create an opening in the longrunning dispute.

“We promised the President that we will work hard to ensure that we gave dairy farmers a reliable market as he directed,” he said. During his speech at the company’s premises, Dr Magufuli hinted that the protracted wrangle might have been fu elled by competitors in the milk production industry in neighbouring countries.

He speculated that they may have been bent on sabotaging Tanga Fresh Company in order to turn Tanzania into a market for milk produced outside the country. “It’s irrational for us to remain a dump yard for products from outside the country; we must change,” the Head of State had emphatically remarked.

He noted that currently, the country had only two milk processing companies Tanga Fresh and Asas Diary, 15 others having collapsed. The Tanga Fresh management told the President that it planned to increase the production capacity to 120,000 litres per day from the current 50,000 litres, as it eyes investment capital of 26bn/- in future, up from the current 12bn/-.