Farmers seek CSC stake

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FARMERS in Matabeleland have formed a consortium seeking to buy shares from the struggling parastatal Cold Storage Company (CSC) amid indications it is engaging foreign partners to finance the acquisition of the shares made available by the government, Southern Eye Business has learnt.

GAMMA MUDARIKIRI
OWN CORRESPONDENT

Proposals by the consortium to buy shares followed a directive by Agriculture co-deputy ministers Paddy Zhanda and David Murapira early this month that the struggling parastatal should look for private-public partnerships as the government is cash-strapped to finance the recapitalisation of the entity.

Zimbabwe Commercial Farmers’ Union past president Donald Khumalo told South Eye Business farmers in the region had grouped and were pooling resources together to buy shares.

“As farmers in Matabeleland we have grouped and already negotiating with foreign financiers in countries like Brazil to partner us to purchase shares at CSC,” he said.

“We need to take advantage of the government move of opening CSC to partnerships as farmers in the region.”

Khumalo said negotiations with the foreign partners were expected to be concluded soon although he could not be drawn into shedding more detail on the deal.

He said farmers were expected to approach CSC upon the finalisation of negotiations with potential partners.

CSC is battling with a debt of $22 million and workers’ salary arrears of $2,1 million and is one of the State enterprises earmarked for privatisation.

The bleeding parastatal, in the first half of the year, recorded a $3 million loss and requires $58 million to fully recapitalise.

The viability of the company suffered a major set-back when the European Union (EU) suspended beef imports from the country in 2001 following an outbreak of foot-and-mouth disease.

CSC had an annual quota to the European Union (EU) of 9 100 tonnes of beef. It also had $15 million revolving payment facility with the EU under which it was paid in advance.

The company used to earn the country at least $45 million per year. This has dropped drastically this year to a loss of $3 million.

Capacity utilisation has plunged to 7% with workforce dropping 500 workers compared to 1 500 in 1999 as the parastatal continues to battle to attract funding due to a weak balance sheet.

However, in 2012 CSC struck a two-year cattle supply contract with Botswana Meat Commission which was expected to boost capacity at its Bulawayo abattoir.

Cattle supplies were supposed to run until December 2014, but the deal had since failed.

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