Ireland's Zambeef reaches tax agreement in Zambia
Zambeef, the Zambia agri firm co-founded by Limerick native Francis Grogan, has successfully appealed a multi-million euro tax assessment in Zambia.
The company - which is listed on London's Alternative Investment Market - is one of the largest argi businesses in Africa and generated turnover of $220m (€191m) last year.
It made an operating profit of $23m in 2015, and also has activities in Ghana and Nigeria.
The company had been embroiled in a long-running dispute with Zambia's tax authorities in relation to a subsidiary, Zamanita.
In 2012, the Zambia Revenue Authority slapped the subsidiary with an almost $10m tax assessment. Although Zambeef had sold the Zamanita subsidiary in early 2015, it retained the liability relating to the assessment.
The dollar value of the assessment is also now significantly less due to exchange rate fluctuations.
Zambeef's unit appealed the assessment and last year Zambia's Revenue Appeals Tribunal ruled in the company's favour. But that decision was appealed by the revenue authorities.
The sides have now reached an agreement that will see Zambeef pay a total of approximately $1.5m to the revenue authority, with some of that comprising recoverable VAT.
Zambeef joint chief executive Carl Irwin said that he was happy to have concluded the "long-standing issue" and that the matter would now be put behind the company.
"This agreement will also allow us to reverse approximately ZMW33.6m (approximately $3.5m using the prevailing exchange rate) provision into our income statement," he said.
After studying agricultural science in UCD, Mr Grogan decided to take up a job as a meat factory manager in Zambia in 1991.
Mr Grogan and Mr Irwin jointly acquired Zambeef's predecessor that year, paying $300,000 for a couple of shops and an abattoir. Zambeef is now involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products and flour in three countries.
It's also one of the largest cereal row-cropping operators in Zambia, and employs over 6,000 people. It owns or manages about 150 retail operations, mostly in Zambia. The company is even involved in manufacturing shoes made from leather from its own tanning operation. Deloitte Africa recently named Zambeef as Africa's second-fastest growing retailer.