Business Reporter
MUTAPA Investment Fund (MIF) CEO Doctor John Mangudya has tabled plans to resuscitate the Cold Storage Commission (CSC) in a development which is set to boost the country’s meat exports.
At Independence in 1980, CSC was one of Zimbabwe’s major foreign currency earners, as it exported thousands of tons of beef to the European Union.
At its peak, the beef processor and marketer used to handle up to 150 000 tons of beef and associated by-products annually and exported to the EU, where it had an annual quota of 9 100 tons of beef.
CSC has been operating below capacity over the years due to serious operational challenges since the turn of the millennium.
Despite identifying an investor and coming up with a Joint Venture with an identified United Kingdom firm, Boustead Beef (Pvt) Limited, nothing tangible has materialized to date.
But speaking to private weekly paper, Mangudya tabled plans to restore the CSC fortunes.
“We have identified that we need to deal with the joint venture, which is not functioning the way it was expected,” Mangudya told the Independent during a trip to the Bahamas last week.
“That joint venture was signed on the 19th of January 2019. Five years down the line, nothing much has happened on the ground. It needs to be reviewed. We now need to say, ‘what is the best strategy of ensuring that we put this low hanging fruit to good use for the purpose of securing employment, farmers and everything.’ There is plenty of demand for our beef,” said Mangudya, who assumed the role after his term as central bank governor expired this year.
“CSC is a low hanging fruit because it owns beef and the markets are there.”
The 25 year JV was inked to escalate efforts to turnaround the meat processor.
Pursuant to the transaction, Boustead assumed control of CSC ranches and meat processing facilities countrywide.
It also took over the responsibility to manage CSC’s distribution centers and residential properties in Harare, Gweru and Mutare, after undertaking to pour about US$130 million to rebuild the firm over five years, bankrolling facelifts of several key facilities, along with providing working capital.
Of that amount, US$45 million was expected to be invested in the first year of the agreement.
Mangudya added: “We (need to) pay the creditors, which are there, and it needs money to ensure that we spruce up abattoirs in Marondera, Masvingo and Chinhoyi so that we can start slaughtering and then we export. I think Bulawayo is fairly okay.”
“We need to actualise that low-hanging fruit. We have started. We have engaged the joint venture holder, which is Boustead Beef, and we have advised them of the need for us to review it. We have also been discussing with the business rescue practitioner on the same issue. So at the end of day, we do things in a very amicable manner to ensure that we go forward,” Mangudya noted.
Content Credit: AMH
