Govt moves to recapitalise CSC
GOVERNMENT has moved closer to concluding a deal to recapitalise the Cold Storage Company (CSC) with potential investors, Lands, Agriculture and Irrigation Development Minister Perrance Shiri has said.
The giant beef processor is among the 12 state enterprises earmarked for speedy recovery under the parastatal reform initiative being implemented by the new political dispensation.
“There are a number of companies that have shown interest in CSC and we have carried out due diligence. We will be making the necessary pronouncement in the next few weeks as we are in the final stages of the negotiations,” Minister Shiri told our Bulawayo Bureau.
He would not be drawn into revealing the details of CSC’s potential investors citing professional reasons. However, earlier indications from close sources were that a joint venture proposal was being discussed by Swiss and United Kingdom investors keen to revive operations at CSC.
“We have carried out due diligence and we are now in the final stages of the negotiations. Right now we cannot disclose the potential investors for CSC because of professional reasons. We want to finalise the deal as soon as possible because Government is aware of the strategic importance of the firm in creating jobs and stimulating economic growth,” said the minister.
Earlier the National Social Security Authority had announced that it was planning to inject $18 million to aid revival of CSC but the deal seems to have collapsed. It is hoped that the joint venture agreement between CSC and the potential investors would basically involve the running of the Bulawayo-headquartered beef company’s abattoirs spread across Zimbabwe. Furthermore, it is also envisaged that the prospective investors would run CSC’s ranches with a possibility of an out grower scheme where they deal directly with livestock farmers.
The parastatal has abattoirs in Bulawayo, Marondera, Masvingo and Chinhoyi. To support such an initiative, the Government has launched the $300 million Command Livestock programme, which is also expected to anchor the revival of CSC through emphasis on artificial insemination, which has a 60 percent success rate for a new breed of bulls and heifers.
The resuscitation of CSC will go a long way in improving the economy through beef exports as it would unlock value in the livestock industry. At its climax, the State entity used to handle up to 150 000 tonnes of beef and associated by-products annually and exported to the European Union, where it had an annual quota of 9 100 tonnes of beef.
The company used to earn the country about $45 million annually but had for the past 10 years been making $6 million loss annually.
Presently, CSC has a debt overhang of more than $25 million, largely as a result of fixed costs such as wages, rates and taxes on land.
Its 413 former workers were being owed $4 million in unpaid salaries.