ZAFFICO to Launch Rights Issue to Fund Forest Expansion and Value Addition Projects
The Zambia Forestry and Forest Industries Corporation Plc (ZAFFICO) has announced plans to undertake a renounceable Rights Issue aimed at raising capital to support its exotic forest plantation expansion and value addition initiatives, following shareholder approval at the company’s Annual General Meeting held on 18 April 2024.
The announcement was made in a statement issued by Mulawo Mwaba, Company Secretary of ZAFFICO Plc, and follows a cautionary notice issued earlier this year. The strategic move comes as the company responds to rising national demand for wood products, and the urgent need to replenish depleting natural forests.
ZAFFICO noted that while it supplied 150,000m³ of roundwood in 2024, Zambia’s total estimated demand sits around 800,000m³, leaving a significant supply gap of 650,000m³. The shortfall has been attributed to deforestation, inadequate plantation coverage, and shifting demographic trends.
To address this deficit and improve long-term sustainability, ZAFFICO plans to:
- Plant 5,000 hectares annually of pine and eucalyptus trees.
- Restore 15,000 hectares of degraded forest land in Muchinga Province, particularly around Nakonde.
- Invest in value addition projects to enhance financial performance and operational efficiency.
As part of its capital raise, shareholders approved the increase of authorised share capital from 400 million to 1.03 billion shares, the registration and listing of 430 million new ordinary shares on the Lusaka Securities Exchange (LuSE), and the execution of the Rights Offer in proportion to existing holdings. A waiver was also approved allowing the underwriter or nominee to surpass the 35% threshold without triggering a mandatory offer.
ZAFFICO is currently in talks with potential underwriters, and further updates will be announced as developments unfold. The Corporation has advised shareholders to exercise caution when trading in its securities, pending finalisation of the Rights Issue.
This announcement has been approved by the Lusaka Securities Exchange, the Securities and Exchange Commission Zambia, and ZAFFICO Plc.
