adminThe CSC used to supply 9 100 tonnes of beef to the EU and there is no reason why the deal cannot be resuscitated because Zimbabwe has largely ridden itself of the foot and mouth disease. During its peak CSC integrated facilities which included abattoirs in Chinhoyi, Marondera, Masvingo and Bulawayo had a slaughter capacity of up to 600 000 head of cattle per year. Now the company is a pale shadow of its former self and is struggling to stay afloat. It needs massive recapitalisation to reclaim its former status and so far the Government has been turning a blind eye to its pleas for financial injection.
The CSC is operating at levels below 10 percent due to a liquidity crunch and stiff competition from private operators who are now enjoying 90 percent of the market share. The resuscitation of the country’s livestock sector is dependent on a viable CSC and because there is potential for livestock production in the communal, A1 and A2 farming sectors, the company should be bailed out by Treasury so that it resumes its role as the country’s major meat processor and marketer. As it is, the company sometimes goes for weeks without activity at its abattoirs.
In July last year, the CSC entered into an agreement with Botswana which saw more than 30 000 cattle from the foot and mouth infested Zone V1 along the border with Zimbabwe being slaughtered at the CSC’s state of the art abattoirs in Bulawayo. Under the Memorandum of Understanding which has since been extended by another four years, the two countries are meant to engage in joint breeding exercises to boost livestock production in both countries and Zimbabwe is expected to receive between 30 000 and 40 000 heifers.
The Botswana deal breathed new life into the CSC and saw the company competing for the first time in a long time with private abattoirs. The deal also saw beef prices dropping sharply and cattle prices recording a gradual firming on the market.
The second phase of the Botswana deal saw that country appointing the Botswana Meat Commission to engage CSC to slaughter at least 60 000 cattle per year over the next two years from Zone 11 which is not affected by the foot and mouth disease. Last month, the company reported that it was yet to resume regional exports due to a slowdown in the number of cattle from Botswana meant to improve beef supply on the local market.
The CSC has been steadily buying cattle from farmers under its cattle restocking programme so that it starts exports to regional markets such as Angola, the Democratic Republic of Congo and Malawi. We feel it should be assisted to continue building its herd at its various ranches dotted around the country so that it is able to meet demand both locally and internationally even without the aid of the Botswana deal. However, the company’s efforts might be hampered by the latest revelations that it is totally broke.
At the recent Zimbabwe Farmers Union Annual Congress held in Bulawayo last week, CSC Chief Executive Officer Mr Ngoni Chinogaramombe said lack of funds was threatening the Government’s national restocking programme as the CSC was broke. He said the company had received more than 13 000 applications from prospective livestock farmers but had failed to process them.
“We received 13 000 applications from farmers but we have not processed a single one of them because we do not have funds. Our hope is that in 2013 things will be better and we can start processing the applications,” said Mr Chinogaramombe.
While the company could do with much needed financial assistance from Government, proceeds of the Botswana deal should be channelled towards boosting its working capital requirements. We feel management needs to get its priorities right and get the company on the right footing.
Online Reporter