HomeBusinessLiquidity crisis chokes local abattoirs

Liquidity crisis chokes local abattoirs

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ZIMBABWE’S liquidity crisis has hit local abattoirs hard in the past year forcing most of them to reduce production to below 50%, according to the Abattoirs Association of Zimbabwe chair Godfrey Chanesta.

MTHANDAZO NYONI
OWN CORRESPONDENT

Chanetsa said business was bad and the industry was presently pinning hopes on the ongoing tobacco sales.

“We had very low sales in 2014 and that seems to have set a wrong pace for 2015, which started on a very low key,” Chanetsa said, without giving any figures.

“As we speak right now, the market is very depressed and most abattoirs in the country have reduced their operations. Consumers don’t have disposable income and I wouldn’t be surprised if abattoirs will start retrenching because there is no business to talk about. Some had a lot of piled stock with no buyers, but we are hopeful that the ongoing tobacco sales will inject money into the economy,” he said.

Abattoirs Association of Zimbabwe chair Godfrey Chanesta
Abattoirs Association of Zimbabwe chair Godfrey Chanesta

However, the tobacco selling season got off to a false start early this month with prices opening at $3,50 per kg compared to last year’s $4,85. The price sunk to 20 cents per kg, leading to farmers protesting against the “exploitative” rate and halting proceedings.

Zimbabwe projects lower tobacco output in 2015 at around 195 million kg from 216 million kg last year, which earned the country $684 million.

Agriculture deputy minister responsible for livestock, Paddy Zhanda revealed that in 1996, Zimbabwe slaughtered 780 000 cattle out of a total herd of 5,9 million, but was now slaughtering around 200 000 out of 5,3 million as people were no longer selling.

State-owned meat processor Cold Storage Company (CSC), which used to be the biggest beef processor in the country, exporting beef to the European Union, is saddled with a $22 million debt and owes workers $2,1 million in outstanding salaries.

The company was at one time the largest meat processor in Africa, handling up to 150 000 tonnes of beef and associated by-products a year and exporting to the EU, but mismanagement and persistent outbreaks of foot and mouth disease halted exports in 2001, affecting its viability.

CSC requires over $50 million to revive operations and settle debts, but has remained a loss-making operation over the years.

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