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Shepias Dube Business Reporter
THE Cold Storage Company is installing a small refrigeration plant taken from its idle Mutare branch at the parastatal’s Bulawayo headquarters as it seeks to contain ballooning costs which were a result of reduced capacity.
In an interview on Thursday, CSC chief executive officer Mr Ngoni Chinogaramombe said the re-installation would cost $20 000 but was expected to boost effectiveness by more than 100 percent.
He said running the existing plant in Bulawayo was becoming expensive and threatening viability of the company which is already facing serious operational challenges.
“We have downsized our refrigeration plant temporarily to make it match the current level of operation and specifically to address the issue of cost of power. Our engineers are working flat out to install the new refrigeration plant which is expected to reduce electricity cost by more than 75 percent,” said Mr Chinogaramombe.
The plant was transferred from the CSC Mutare branch where it has been lying idle for more than 10 years.
Mr Chinogaramombe said with the existing plant the parastatal had been paying out between $35 000 and $40 000 a month towards electricity bill.
The CSC plant, considered to be among the largest in Africa, has a capacity of handling more than 800 cattle per day but has never been fully operational even at its peak.
He said the prevailing economic environment required companies to be lean to promote viability.
It is against this background that the company has seen it necessary to downsize the refrigeration plant to make it more viable.
“The prevailing economic landscape requires companies to downsize in line with the level of business. The situation where 40 rooms are fired even when slaughtering a small number of cattle is unsustainable hence the need to have a small and manageable plant,” he said.
The new plant has the capacity to handle 350 cattle a day and was expected to push down the electricity bill to $10 000.
Mr Chinogaramombe said electricity costs had been one of the company’s biggest challenges and the new development was expected to put the parastatal on the right track.
“It was indeed expensive for farmers and butcheries to do business with the CSC but due to this cost management strategy we are able to reduce our service charges to match the smaller abattoirs that had become popular with customers because of their cheaper services.”
The company has since reduced its service slaughter fees from $38 to $25 per head with a possibility of reducing it further to $20 once the new plant is fully operational.
He said the new cost structure gave the parastatal a comparative advantage over mushrooming abattoirs because it offered quality products and services.
He said sales records for the month of May showed that the strategy was already paying dividends.
“This new cost management strategy had an effect of bringing farmers to CSC during the month of May when slaughter at the company abattoirs doubled from the usual 800 beasts a month to close to 2 000,” he said.
Mr Chinogaramombe said this was a positive development considering that all abattoirs in the Bulawayo region slaughter about 7 000 cattle a month.
Business at the parastatal was also significantly boosted by the temporary closure of one of Bulawayo’s emerging abattoirs – Mbokodo – due to the suspected outbreak of foot and mouth disease.
Mr Chinogaramombe appreciated the support the parastatal was receiving from Vice-President Phelekezela Mphoko who was instrumental in the installation of the plant.
“The implementation of this project would not have been successful without the support of our vice president, Cde Phelekezela Mphoko who has stood with us throughout,” he said.
VP Mphoko who has been tirelessly calling for the revival of industry in Bulawayo, is expected to commission the plant later this month.
The revival of the Cold Storage Company is important to the city’s economic turnaround strategy as the parastatal anchors many industries in Bulawayo.
During its peak, CSC provided business for leather manufacturers, sole manufacturers, stock feed manufacturers and many other companies.
However, Mr Chinogaramombe was optimistic that things would soon change for the better at the company.
“The future is bright for us because there are many foreign investors who are interested in partnering us. Once our turnaround strategy is approved by Cabinet there will be a positive change at the company,” he said.
The parastatal has been facing major operational challenges resulting in capacity dropping to lows of 10 percent.
Last week workers in Bulawayo stormed the offices of management demanding outstanding salaries dating back to 2009.
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