The Sunday News
AILING meat processor and distributor, Cold Storage Company, could be losing $250 000 per month in potential revenue at its headquarters in Bulawayo since most of its business has now been taken by private abattoirs, Sunday Business has learnt.
Statistics from the Zimbabwe Abattoirs Association show that the country slaughters between 18 000 and 22 000 cattle a month with the abattoirs in Matabeleland accounting for 6 000 to 7 000 slaughters.
In the past the CSC used to slaughter more than 90 percent of cattle in Matabeleland and for each slaughter the company charges $40 per beast although $2 is paid to the Department of Veterinary Services as an inspection fee.
If CSC was slaughtering the Matabeleland quota and charging the above fees it could raise more than a quarter of a million in a month from slaughtering fees alone.
The market has now been taken by private abattoirs that have sprouted in the region.
Officials at the company said they had submitted a restructuring strategy to the Ministry of Agriculture, Mechanisation and Irrigation Development with the main thrust being to seek an investor for a joint venture arrangement.
CSC has over the past decade-and-a-half been facing a myriad of challenges and constraints largely due to underutilisation of capacity (at both factories and ranches), failure to raise adequate working capital (under-capitalisation), disease outbreaks (mainly foot and mouth), decline in commercial cattle herd, high staff turnover and an ageing fleet.
It has over the years managed to stay afloat through service slaughter, rent from tenants using its industrial complex and leasing its feedlots and ranches in various areas in the country.
“The company has since given us its restructuring plans but it has to be noted that it’s an ongoing process, it cannot be done within a short space of time. We are in the process of looking into various options but it’s getting highest attention at every level,” said the Deputy Minister of Agriculture, Mechanisation and Irrigation Development responsible for livestock production Cde Paddy Zhanda.
CSC board chairman, Professor Lindela Ndlovu confirmed that the company forwarded its restructuring plan early this year and was waiting for a response from the ministry.
“We forwarded our restructuring strategy at the beginning of this year but the ministry is still going through it. They said it was likely to be approved (by Cabinet) but we are still waiting for a formal acknowledgement of that.
However, a Joint Venture has been our main thrust throughout and we have always advocated for it, that’s the big part of our strategy,” Prof Ndlovu said.
He said the company was looking forward to attracting investors for each of its five abattoirs.
CSC has its biggest abattoir in Bulawayo which is one of the biggest in Africa and then others in Masvingo, Chinhoyi, Marondera and Kadoma.
“Our strategy is to de-link our assets because it will be difficult to get an investor for the whole of CSC. So it’s easier to package it by abattoirs so that each one of them has land from where cattle can be produced and then be slaughtered with CSC remaining the holding company,” Prof Ndlovu said.
CSC’s abattoirs, which are sophisticated and integrated facilities with a slaughter capacity of up to 600 000 head of cattle per year, are now a white elephant save for Bulawayo and Chinhoyi, which still have limited and sporadic slaughters.
“The company is suffering from under utilisation of infrastructure due to lack of capitalisation, which is the reason why we need a Joint Venture because we need an investor with resources.
“We have the infrastructure, mostly the land, abattoirs but it’s how to resuscitate them. Our Bulawayo and Chinhoyi abattoirs are still intact and Masvingo to a certain extent but the ones in Kadoma and Marondera need to be rehabilitated,” Prof Ndlovu said.
CSC is leasing all its seven ranches which are dotted in various areas around the country. These are Charter Estates and Darwendale, Chivumburu, Mushandike, Dubane, Mapaneni, Winterblock and Willsgrove.
However, there were reports that some of the people leasing the farms were not paying anything to CSC.
“All our ranches are intact but we have more rented animals than our own. We have to get to a point where we have cattle of our own,” Prof Ndlovu said.
During its peak CSC used buy cattle from farmers and offered highly competitive prices. However, it stopped doing so about a decade ago due to lack of finance.
It also had a number of programmes which benefited both the company and the cattle producers such as the heifer or oxen exchange.
Through these schemes the company exchanged heifers and productive cows for slaughter stock.
Through its custom feedlotting the company provided feed to farmers in possession of cattle that were in very good condition so that the animals could be fattened in order for the farmers to receive better prices.
Custom feedlotting is advantageous to the farmer in that the value of the animals is raised and in the worst case scenario, the farmer does not register any losses as a result of death due to lack of grazing.
