31 December 2012

Zimbabwe: CSC Strikes Botswana Deal

THE Cold Storage Company has struck a two-year cattle supply contract with Botswana Meat Commission, set to boost capacity at its Bulawayo abattoir. Cattle supplies will begin during the first

week of next month, with the contract running to December 2014, chief executive Mr Ngoni Chinogaramombe said recently.

"It is a two-year contract and it will certainly boost our slaughtering capacity at Bulawayo abattoir," he said. But he could not say how many cattle would be supplied under the deal.

Last year, CSC signed a cattle supply contract with the government of Botswana which saw the company slaughtering 26 447 beasts between July and August at the Bulawayo abattoir.

CSC, which used to keep between 20 000 and 25 000 cattle at any given time in the late 1990s, has for the past few years survived on service slaughter due to depleted stock at its ranches.

In 2010, CSC -- which has since lost its ISO certification -- slaughtered only 916 beasts of its own and 11 263 for third parties.

This was disclosed by its chairperson, Professor Lindela Ndlovu, in a report tabled this year before the Parliamentary Portfolio Committee on Agriculture, Water, Lands and Resettlement.

Prof Ndlovu said the company was now keeping an average of 637 beasts, as its Livestock Supply Scheme has remained inactive due to lack of funding.

The company's woes have also been compounded by increased stiff competition from private abattoirs, now controlling over 90 percent of the country's beef market.

The deregulation of the industry in 1992 saw the entrance of new players who presented serious challenges for CSC, which had enjoyed a monopoly since 1937.

The Bulawayo-based meat processor also lost its European Union annual quota of 9 100 tonnes of beef in 2001 following the outbreak of foot and mouth disease.

CSC had a US$15 million revolving payment facility with the EU under which it was paid in advance. But the facility was discontinued after the suspension of imports.

The company used to generate at least US$45 million annually from the EU quota and, if capacitated, can generate up to US$70 million annually.

The company employed 1 500 permanent workers and an average of 680 workers on a temporary basis.

Before the company ran into problems, it had a slaughter capacity of 600 000 cattle a year.

CSC is among 10 State enterprises identified by the Government in 2010 for urgent restructuring but little progress has been made so far.

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