ZAFFICO Eyes Expansion Through Rights Issue to Bridge Timber Supply Gap
Zambia Forestry and Forest Industries Corporation Plc (ZAFFICO) has announced further progress toward a major expansion plan aimed at closing Zambia’s growing wood supply deficit, following the successful passing of key resolutions at its 2024 Annual General Meeting.
In a cautionary statement issued by Company Secretary Mulawo Mwaba, ZAFFICO confirmed that it will proceed with a Rights Issue to raise capital for scaling up exotic forest plantation projects and enhancing value addition across operations.
The announcement follows shareholder approval on April 18, 2024, to increase the company’s share capital from 400 million to over 1 billion ordinary shares and issue up to 430 million new shares under a renounceable Rights Offer.
ZAFFICO’s move comes as Zambia faces a persistent shortfall in Roundwood supply. In 2022 alone, the company supplied 276,000m³ of Roundwood—against an estimated demand of 800,000m³, leaving a deficit of 561,000m³. Supplies have since fallen further, reaching just 150,000m³ in 2024, due in part to declining natural forests and inadequate plantation coverage.
To reverse this trend, ZAFFICO plans to plant 5,000 hectares of pine and eucalyptus annually, while also restoring 15,000 hectares of degraded natural forest in Muchinga Province, particularly around Nakonde. The strategy also includes investments in value-added timber processing to improve financial performance and operational efficiency.
ZAFFICO is currently in discussions with potential underwriters for the Rights Issue and has applied for necessary approvals from the Securities and Exchange Commission (SEC) and the Lusaka Securities Exchange (LuSE). A special waiver is also being sought to exempt the underwriter from triggering a mandatory offer should they acquire 35% or more of the company’s voting rights.
Until the Rights Offer process is finalized and more details are announced, shareholders are advised to exercise caution when dealing in ZAFFICO securities and seek professional investment guidance.
