Govt ap­proves CSC turn­around strat­egy

Chronicle (Zimbabwe) - - Business Chronicle - Pros­per Ndlovu

THE Gov­ern­ment has given the Cold Stor­age Com­pany (CSC) the green­light to im­ple­ment its turn­around strat­egy paving way for the re­vi­tal­i­sa­tion of the gi­ant paras­tatal.

De­spite be­ing a strate­gic in­dus­try pil­lar in the coun­try, the CSC has been mak­ing losses and is sad­dled by debts that run into mil­lions of dol­lars. Cred­i­tors, who in­clude work­ers, are lit­er­ally tak­ing turns to at­tach prop­er­ties over un­paid ar­rears.

The CSC man­age­ment and board had en­gaged the Gov­ern­ment seek­ing ap­proval to mo­bilise fund­ing in­ter­nally through mea­sures such as the dis­posal of some of its idle as­sets, which have an es­ti­mated value of $4.5 mil­lion.

The pro­posal was made in 2012 but had not been ap­proved pend­ing a foren­sic au­dit whose re­sults are yet to be re­leased. Some of the prop­er­ties ear­marked for dis­posal are in Harare, Kadoma and Gweru.

On Thurs­day Pres­i­dent Mu­gabe an­nounced that the Bu­l­awayo-head­quar­tered firm was poised for re­sus­ci­ta­tion, which would im­pact pos­i­tively on the live­stock value chain.

“Gov­ern­ment re­cently ap­proved a turn­around plan for the Cold Stor­age Com­pany as part of the pro­gramme to re­vive the coun­try’s beef in­dus­try,” said Pres­i­dent Mu­gabe while of­fi­cially open­ing the Fourth Ses­sion of the Eighth Par­lia­ment in Harare.

Agri­cul­ture, Mech­a­ni­sa­tion and Ir­ri­ga­tion Devel­op­ment Deputy Min­is­ter in charge of live­stock Paddy Zhanda is on record say­ing CSC would be fully op­er­a­tional by De­cem­ber this year.

“Our plans are that CSC should start work­ing and be fully op­er­a­tional be­fore De­cem­ber 2016,” said Deputy Min­is­ter Zhanda re­cently.

“If CSC is fully func­tional the ben­e­fi­cia­ries will be these farm­ers who will have a mar­ket for their live­stock. My de­sire is to see CSC open to busi­ness again.”

The com­pany used to be one of the big­gest em­ploy­ers in the coun­try and its re­vival could be a big win for Zim-As­set, the Gov­ern­ment’s eco­nomic blue­print, in terms of job cre­ation and value ad­di­tion mainly on the food se­cu­rity and nu­tri­tion clus­ter.

CSC has been suf­fer­ing from se­vere un­der-cap­i­tal­i­sa­tion and re­quires about $83 mil­lion to re­vamp its op­er­a­tions and op­er­ate prof­itably. CSC was established in 1937 in terms of the Cold Stor­age Com­mis­sion Act, with the man­date of procur­ing, pro­cess­ing and mar­ket­ing beef, lamb, goat and re­lated prod­ucts. The Gov­ern­ment is the sole share­holder in the com­pany that owns three abat­toirs in Chin­hoyi, Bu­l­awayo and Masvingo.

The firm was com­mer­cialised in 1995 and adopted the name Cold Stor­age Com­pany. It also owns canning and tan­nery sub­sidiaries, which are lo­cated in Bu­l­awayo.

How­ever, the canning com­pany is not op­er­a­tional be­cause of lack of in­puts from the par­ent com­pany while the tan­nery is cur­rently un­der ju­di­cial man­age­ment.

Re­cent re­ports have shown that out of a to­tal of about 77 000 na­tional slaugh­ters in the first quar­ter of 2015, CSC only slaugh­tered about 5 000, which rep­re­sents 7.3 per­cent of the to­tal.

The com­pany has an es­ti­mated to­tal na­tional head of about 792 cat­tle and its dis­mal per­for­mance is at­trib­uted to a num­ber of fac­tors, mainly lack of cap­i­tal. CSC posted a loss of $1.3 mil­lion in the first quar­ter of 2015, a re­cent Par­lia­men­tary re­port has shown.

The com­pany owes over $28 mil­lion to its cred­i­tors, mainly to util­i­ties such as Zesa. It owes em­ploy­ees about $3.5 mil­lion for wages and has had some of its as­sets at­tached by em­ploy­ees over out­stand­ing wages.

The Gov­ern­ment has been ne­go­ti­at­ing with in­vestors such as Al­ter­na­tive Ini­ti­a­tion for Devel­op­ment of Africa who had plans to in­ject cap­i­tal of $80 mil­lion.

CSC also faces se­vere com­pe­ti­tion from pri­vate abat­toirs fol­low­ing the lib­er­al­i­sa­tion of the beef and live­stock in­dus­try in 1992.

It is es­ti­mated that there are over 600 reg­is­tered and un­reg­is­tered abat­toirs and slaugh­ter poles in Zim­babwe. Prior to lib­er­al­i­sa­tion CSC dom­i­nated 50 per­cent of the mar­ket share and by 2002 this had de­clined to six per­cent es­pe­cially af­ter the sus­pen­sion of ex­ports to the Euro­pean Union (EU).

The com­pany has a huge in­fra­struc­ture stock that in­curs large over­heads costs in the form of elec­tric­ity and wa­ter, which makes CSC un­com­pet­i­tive against the small pri­vate abat­toirs. On av­er­age, the elec­tric­ity bill for CSC per month is $35 000 ir­re­spec­tive of the vol­umes traded while that of a pri­vate one is about $5 000.

Cold Stor­age Com­pany premises in Bu­l­awayo

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