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China to set up a cigarette plant in Zim

CHINA is expected to set up a cigarette manufacturing company in Harare following discussions between the government and officials from the Asian giant, it has emerged.

Finance and Economic Development minister Patrick Chinamasa said at a recent meeting that the government held discussions with the State monopoly company of China, which is one of the major consumers of local tobacco.

He said local companies must focus on value addition to create more jobs.

“We are getting indications from China and for a longtime we have been engaging with China. There is a State monopoly of tobacco in China and you cannot get tobacco whether raw or processed into China, unless through the State monopoly company,” Chinamasa said.

“We have been asking them to get a quota in China, but they refused then we changed tact and said they could come and make a factory to manufacture cigarettes. If successful, they can come and set up a factory and export cigarettes to China.”

China is the major consumer of Zimbabwean tobacco.

Since 2009, the number of farmers growing tobacco has been on the increase. The golden leaf output has been on the rise and prices have been favourable. But for the 2014/5 season, most tobacco farmers were disappointed because the prices were very low.

Tobacco is mostly grown in the country through contract farming, whereby the contractor provides inputs to the farmers. Tobacco output has been on the increase since 2009 and it reached its peak in 2014 producing 216 million kilogrammes but this year the farmers produced 198 million kgs due to the poor rainfall patterns experienced in the country.

Chinese President, Xi Jinping was in the country this week and signed 12 deals with the government in sectors such as infrastructure, telecommunications and energy. Zimbabwe Power Company signed a co-operation agreement for Hwange 7 and 8 to produce 600 megawatts of power.

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