STATE-OWNED meat processor Cold Storage Company (CSC) is set to lose more than 800 head of cattle to settle unpaid wages.
Although the exact size of the CSC herd could not be established, Agriculture deputy minister responsible for livestock Paddy Zhanda has been quoted saying the parastatal holds about 600 cattle.
CSC, at one time the largest meat processor in Africa, handled up to 150 000 tonnes of beef and associated by-products a year and exported beef to the European Union, where it had an annual quota of 9 100 tonnes of beef.
CSC also had a $15 million revolving payment facility with the EU and used to earn Zimbabwe at least $45 million annually.
The firm is now operating at less than 10% of its capacity, employing 500 workers from as much as 1 500 in the 1990s.
According to a notice seen by The Source yesterday, Hollands Auctioneers will auction 844 CSC cattle comprising calves, bulls, steers, heifers and cows in Bulawayo over three days — on Thursday July 16 2015, Monday July 20 and Thursday July 30 2015.
In 2013, the CSC workers’ committe won an arbitration award for $513,110. The CSC only managed to pay $60,000, leaving a $453,110 debt.
The workers then approached the High Court to register the arbitration award, which is now being enforced.
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The CSC is reportedly making an annual loss of $6 million, stretching over the past 10 years.
Recently, CSC chief executive, Ngoni Chinogaramombe told a parliamentary portfolio committee on agriculture that the company has secured an investor to inject $80 million into its struggling business but government is withholding approval, demanding a forensic audit to ascertain the state of the company.
He said the company had submitted three turnaround strategies since 2009 which had not been approved by government, the shareholder.
He said in 2009 a plan by an Indonesian investor to inject $57 million into the company through a joint venture failed after government took too long to approve the deal.
In 2012, CSC submitted another proposal to dispose of the company’s non-core assets to raise $8,5 million, which was also rejected.
Another plan, submitted in November 2013 and included disposal of idle assets for $14,5 million and proposals for joint ventures met the same fate.
Once a continental giant, CSC has been broken by poor management and persistent outbreaks of foot and mouth, which halted import in 2001.
Private abattoirs, some of which are hiring CSC facilities, have moved in to fill the void left by the parastatal in the domestic market.
Its tannery was affected by import of raw hides, but government recently imposed a 75 cents per kg import levy for raw hides, which has seen an increase in locally processed hides from 1 000 per month in January to 10 000 in May.
Challenges facing the company include lack of long-term funding, antiquated equipment, declining market share which dropped to below 40% since government deregulated the beef industry in 1992.
The company’s debts have ballooned to over $25 million from $9 million in 2009, mainly from fixed costs such as wages, rates and taxes on land. – The Source
