[2008-07-23]  Red Star's Zambian Branch Doing Well, Says Top Official
RED Star Holdings says the performance of its Zambian branch since it started trading in April has surpassed the break-even point.
Chief executive Mr Denford Mberi said the branch is having limited trading off pallets while operating from a wholesale pending approval by the local authorities to ship shelving and shop fittings to Lusaka, Zambia.
Plans to officially open the branch are at an advanced stage," Mr Mberi said.
The group was leasing the premises, which Mr Mberi said was strategically positioned in a congestion-free area with "lots of space for parking"
"The group said interest from the locals (in Zambia) was strong and there had been "repeat orders in significant quantities".
The Red Star Distributors Zambia project had been funded through a US$1,2 million loan from a Zambian bank guaranteed by its parent company Star Africa.
It had drawn down US$365 000, which amounted to $21,38 trillion. Mr Mberi said he did not expect the group to take more than two years to pay back the loan.
Mr Mberi said the branch would mark a milestone in the company's regional expansion programme, "placing the group in a more stable platform to launch other regional expansion projects.
The local supply chain will generate foreign currency that will be used to prop-up their foreign exchange inflows.
This will then be used to import essential raw materials needed to improve production capacity for the benefit of both local and export markets," he said.
The group plans to be in 10 countries by 2011 but Mr Mberi said they would consolidate in Zambia first before moving to other countries. He reiterated the possibility of a management contract in an unnamed project
The group would not export local products into Zambia but Zimba-bwean suppliers with excess capacity would be exporting to Red Star for resale.


Source: ALLAFRICA