The Sunday News
THE results of a forensic audit being carried out at the Cold Storage Company (CSC) to examine and evaluate the state of the ailing meat processor and marketer are set to be released this month, an official has said.
The comprehensive due-diligence forensic audit to determine the firm’s financial information, assets, liabilities and management systems was instituted following a Cabinet recommendation as part of Government’s efforts to facilitate the company’s turnaround.
“At the moment I can’t comment. I can’t speak much about CSC because the audit report will be out in a week or two. So if I speak anything about CSC at the moment it might be misconstrued as an act of trying to cover up on something. So I can’t comment until the minister presents the report,” said CSC chief executive officer Mr Ngoni Chinogaramombe in an interview.
Contacted for a comment on Friday, CSC board chairman Professor Lindela Ndlovu confirmed that a private accounting firm conducted an audit at the company’s headquarters in Bulawayo two weeks ago and proceeded to other branches. CSC has other branches in Masvingo, Marondera, Chinhoyi and Kadoma.
“They were here two weeks ago and started their assessment with the Bulawayo branch and later proceeded to other branches,” Prof Ndlovu said.
Asked to comment on the company’s prospects, Prof Ndlovu said: “I think it will be easy to comment after two weeks, at the moment we are still at a negotiation stage.”
Agriculture, Mechanisation and Irrigation Development Deputy Minister responsible for livestock production, Paddy Zhanda said the Government was still exploring ways of recapitalising the company.
“We are still looking at various options of recapitalising the company, it’s an ongoing process but something is being done,” he said.
Renowned livestock specialist Dr Ronny Sibanda of Dial-Honour Consultancy said there was a need for massive capital injection to revive the waning fortunes of CSC.
“I don’t know what model they (CSC and Government) are thinking about but the company has been suffering from poor and incompetent financing. So whatever model will be adopted it must be premised on massive capital injection and it should be managed judiciously,” Dr Sibanda said.
Two years ago, the ailing meat processor and marketer sent its turnaround strategy to Government. The company’s demise started in 2001 after the European Union suspended imports of beef and related products from Zimbabwe following an outbreak of Foot and Mouth Disease. The company has also been hit hard by illegal sanctions by the West on the country. During its peak CSC also used to 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. The company is now surviving mostly on slaughter fees and rentals it receives from leasing its properties. Its slaughter rate has been on a free fall over the last decade and are half down from 50 000 to below 2 000 cattle per month. Earlier efforts to revive the company failed.
Five years ago an Indonesian firm Ostrindo International cancelled plans to revitalise CSC Bulawayo plant. The CSC board had granted Ostrindo a 15-year lease to run the Bulawayo abattoir in an effort to revive beef production but the Indonesian company opted out of the deal citing the country’s diminishing livestock herd.
