THE TROUBLED parastatal Cold Storage Company management is under pressure to submit a comprehensive turnaround strategy aimed at resuscitating the ailing entity following a government directive late last year for the leadership to come up with sustainable solutions to problems bedevilling the company.
GAMMA MUDARIKIRI OWN CORRESPONDENT
Agriculture co-deputy ministers Paddy Zhanda and David Murapira last October directed management at CSC to look for private-public partnerships (PPPs) and submit a turnaround strategy to salvage the ailing State enterprise and return it to growth and profitability.
Zhanda told Southern Eye Business yesterday that CSC was still to submit the proposal for the turnaround of the $22 million indebted State enterprise, adding that his ministry was pressuring management to comply with last year’s directive.
“Nothing has been finalised,” Zhanda said.
“We are in consultation with the CSC board and management, and we are expecting a strategy paper anytime soon. We are applying the pressure so that things move,” he added.
The government had ordered the management to open up to PPPs as one of the moves of reviving the ailing parastatal, resulting in the Matabeleland farmers grouping forging a consortium to purchase a stake in CSC. The consortium is understood to be in the process of pooling together resources to finalise the deal.
Zhanda said the CSC was yet to forge partnerships with potential suitors in an effort to raise the much-needed capital to turnaround the struggling parastatal.
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The bleeding State enterprise, 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 exports from the country in 2001 following an outbreak of foot-and-mouth disease.
CSC had an annual quota to the EU of 9 100 tonnes of beef. It also had a $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 the workforce dropping to 500 compared to 1 500 in 1999.
