A Kenyan company that signed a deal to buy $180.2 million cashew nuts in Tanzania will not be allowed to do so after it failed to fully honour an agreement, the Tanzanian government has said.
Little-known Kenyan company Indo Power Solutions signed an agreement with the Tanzanian government on January 30 to buy 100,000 tonnes of cashew nuts. But it did not implement provisions of the contract on time, Tanzanian Industry and Trade minister Joseph Kakunda told The Citizen on Monday.
Indo Power signed the agreement with the Cereals and Other Produce Board of Tanzania.
During the signing ceremony, Indo Power chief executive Brian Mutembei said the company would directly pay the Bank of Tanzania for the raw cashew nuts, adding that shipment to Kenya would begin on the first week of February.
But Mr Kakunda said the company had failed to finalise important legal procedures. He added that the government had now signed agreements with six other firms.
“Forget about the company that signed a contract with us in Arusha (Indo Power) because it failed to honour the agreement. We have signed contracts with six other firms, which are now in the process of fulfilling provisions of the agreements. Those that will make payments first are the ones that will collect the merchandise,” he said.
Mr Kakunda declined to name the six companies, only saying that two of them are local while the rest are foreign-owned.
“Last week, representatives of two foreign companies visited the country to inspect infrastructure, including roads and ports, before sending feedback to their respective countries. Generally, they expressed satisfaction,” he said.
Earlier, there has been concerns on whether Indo Power would have the capacity to fulfil the deal, with some pundits pointing out that the Kenyan firm may have merely acted as a broker for a third party.