Cold Storage Company stews in debt
By Kudakwashe Mutandi
The Cold Storage Company is clinging to one abattoir and 700 cattle as it struggles to remain afloat, though it is understood a turnaround plan has been placed before Cabinet.
The parastatal’s fortunes have been blighted by allegations of mismanagement, corruption and heightened competition from private abattoirs.
Over the years, CSC has been involved in negotiations with potential suitors willing to operationalise its depots in Masvingo, Kadoma, Marondera and Chinhoyi, but analysts say the US$22 million debt overhang has been a major put-off for investors.
In all, it is estimated that more than US$80 million is needed to bring the company back to its feet.
Agriculture, Mechanisation and Irrigation Development Deputy Minister (Livestock Production) Paddy Zhanda last week said Government was confident that CSC could be resuscitated.
He, however, noted that there had been no major capital injection from Government since dollarisation of the economy in 2009.
“We are waiting for Cabinet approval and I am sure you know how Cabinet works. We cannot talk of investors now when we have not even injected any capital ourselves into the company. An investor cannot come and put money into a company without any structural plan, but we will make sure it will be resuscitated and ensure it is viable,” said Deputy Minister Zhanda.
The 77-year-old business used to play a central role in processing and marketing of Zimbabwe’s beef, handling some 500 000 beasts yearly.
CSC boss Mr Ngoni Chinogaramombe said last week the parastatal was operating one abattoir in Bulawayo and leasing out 9 200 livestock units.
“We are still waiting to be guided by the Government when they find the investors.
“We gave them our turnaround strategy which they are using to scout for the investor. We are really struggling,” said Mr Chinogaramombe.
He said they had just 700 cattle left, down from 10 000 at the turn of the millennium.
Investors feast on CSC carcass
Private investors have been swooping on some of the firm’s assets.
Recently, Trek Petroleum, which has a much more visible footprint in the fuel sector, began leasing one of CSC’s seven farms — Maphaneni ranch in Kezi, Matabeleland South.
Trek has invested an estimated US$1,6 million into the venture and acquired 1 700 cattle for the ranch.
The company’s general manager, Mr Onias Sanangura, said: “For us to continue growing as a company, we realised that it is important to diversify from the petroleum market and try something new. We responded to an advert in the newspaper where CSC was seeking a partner and met all the requirements. Our investment was about US$1,7 million.
“We are in the process of partnering Arda at Doreen Spride Estate in Kadoma, where we will import 3 000 heifers from Namibia. We will import 300 head per month for the coming 10 months for the estate in Kadoma as we expand our investments in cattle.
“All our partnerships with these parastatals are for a duration of five years,” said Mr Sanangura.
CSC was once one of Africa’s largest meat processors, handling up to 150 000 tonnes of beef and associated by-products a year and exporting to the lucrative European market.
Private abattoirs have moved in to fill the void. The latest statistics show that the number of cattle slaughtered at CSC has gone down from 50 000 per month a few years ago to just under 1 000.
Most activities are confined to Bulawayo.
The Marondera and Kadoma abattoirs were allegedly vandalised/cannibalised and will require substantial investment to come back online; while other plants in Chinhoyi, Bulawayo and Masvingo have been mothballed.
In addition, export licenses to the EU have long lapsed.
From 1983 to 1987, CSC handled an estimated 500 000 cattle a year through the abattoirs and 250 000 cattle through the feedlots and cattle ranches.
The cattle finance scheme financed about 600 000 herd of cattle on commercial farms.
At its peak Zimbabwe export sales were: EU — 9 000 tonnes; Angola — 12 000 tonnes; Indian Ocean Islands — 3 000 tonnes; and Switzerland — 1 500 tonnes.
Meanwhile, other countries in the region are enjoying the beef trade.
In 2012 total beef and veal exports from Namibia amounted to 18 100 tonnes, with South Africa accounting for 70 percent of the total.
Exports from Botswana amounted to 16 400 tonnes, with South Africa accounting for 94 percent of these.
Agricultural and livestock experts have recommended restoration of the cattle finance scheme to provide farmers with long-term low interest terms under which to restock, formalisation of auction systems and re-fencing of commercial farms.
Re-establishment of discipline and veterinary controls across the country for disease control are also crucial. The Sunday Mail