The Sunday News
Dumisani Nsingo Senior Business Reporter
THE country’s abattoirs are reportedly holding onto thousands of cattle hides worth over $4 million for speculative purposes in anticipation of Government reviewing the levy export and reversing the ban on the shipment of the raw product outside the country. In 2013 the Government introduced a levy of $0, 75 on every kilogramme (kg) of raw hide for export, a move that was expected to boost value addition in the leather industry, as well as curtail the exportation of raw hides by local abattoirs.
Then, through the Finance and Economic Ministry in 2014, banned all raw hide exports.
Zimbabwe Commercial Farmers’ Union Matabeleland North chairman Mr Winston Babbage said abattoirs were cunningly short-changing farmers by deliberately keeping cattle hides without payment after slaughter.
“We feel abattoirs have been have been shortchanging farmers for a long time. Farmers should be given money for the hides from their slaughtered animals after all they are made to pay a slaughter fee of up to $30. Abattoirs are already making a lot of money from selling the animals’ fifth quarter including fat and blood meal which they harness for the production of stockfeed.
“The non-payment of hides started at a time when the Cold Storage Company (CSC) used to go to the communal areas to buy cattle using their own vehicles so it considered the hide as transport payment. When things changed as CSC no longer had the monopoly the other abattoirs continued not to pay. As it is these abattoirs are sitting on stocks worth about $4 million,” said Mr Babbage.
Leather Institute of Zimbabwe president Mr Cornelious Sunduza acknowledged that abattoirs were sitting on large hides stockpiles but hinted that there was a need for all stakeholders to work together for the development of the leather sector.
“Our recommendation is that the sector players should be guided by the Leather Strategy document and a wholesome approach should be done involving the farmers, abattoirs and the manufacturing sector. The formation of the Zimbabwe Leather Development Council is overdue as it is the body that could harmonise the sector players and the various line ministries.
“At the present moment the sector needs capital injection for it to enable to take up the hides. The fifth quarter policy or business model needs to be reviewed in the light of the developments nationally. Fifth quarter worked well during the CSC monopoly but now people want economic gain to accrue to them directly,” said Mr Sunduza.
He said the export levy was an initiative of the sector in order to encourage value addition of hides.
“The ban on the export of hides is not benefiting anyone. The update and capacity of our manufacturing is very low due to financial constraints, so even if the abattoirs offer the hides, the manufacturing sector cannot take them up so the question of whether we are happy or not does hold any material substance to the purpose and objective of the gains of the sector,” Mr Sunduza said.
He said a hide was seven percent of the fifth quarter while organs were 15 percent with blood and fat being eight percent.
Tanneries are being forced to buy hides at $0,90 to $1 per kilogramme by abattoirs, a situation, which makes the finished product very uncompetitive.
Zimbabwe Abattoirs Association Matabeleland vice-chairman Mr Roger Tavares said the price of cattle purchased at auctions and abattoirs, globally includes every part of the animal.
“However, when an animal is slaughtered for a third party such as referred to as a service slaughter a fee is charged that includes the retention of the hide by the abattoir or slaughter pole. This is part of the service slaughter. In the event that the customer for which the service is provided insists on retaining the hide, they are most welcome as long as an amount of the value of the hide is paid to the service provider,” said Mr Tavares.
He said there was no demand for hides largely owing to the country’s exorbitant levy export.
“Currently there is no demand for hides by tanners and you can only contract tan a hide of which there is no market for the product. As there is a levy for the export of the wet salted hide of $0.75 per kg which is higher than the international current market value. For your information abattoirs have tens of thousands of hides in stock across the country in different rotting stages,” Mr Tavares said.
Another abattoir operator and farmer, Mr Chris Androliaicos said most abattoirs were not benefitting from the by products produced from cattle’s fifth quarter since they do not have plants for manufacturing them further stating that the quality of the country’s hides did not meet the required international standards.
“It cost a lot of money to make by products from the fifth quarter after all Bulawayo Abattoirs is the only abattoir in Bulawayo with such a by-product manufacturing plant…One thinks we also have to take note of is that we in Zimbabwe produce ‘crap’ of hides and as it is abattoirs are sitting on thousands of hides,” Mr Androliaicos said.
