Botswana Meat Commission (BMC), a government owned Commission will soon fall in the hands of private investors, Chief Executive Dr Akolang Tombale revealed this week.
He said the troubled Commission is currently in negotiations with some investors, who could be BMC’s ‘strategic partners’ and bring in a positive turnaround to the loss-making beef producer. Already, BMC is at an advanced agreement level with a company called Frey Food Processing, based in Durban, in neighbouring South Africa. “The company will buy a stake and be involved strategically at the BMC Maun abattoir,” Dr Tombale said. Although he declined revealing the other investors who will be part owners at the Francistown and Lobatse abattoirs, Dr Tombale said the investors are expected to inject capital into the commission, to help boost its capacity and to have the financial muscle to penetrate the new markets. “As we speak, we have engaged a number of auditing firms so we could complete valuations of the entire BMC before reaching an agreement of how much stake to give to investors,”
However Dr Tombale talked of a maximum time of six months to a year before the valuation process could be completed. “This would also allow us to re-stabilise the BMC thus making it more valuable than its current value,” he said, implying that in a loss making state, BMC would be valued cheaply unless it was profit making. However BMC finance director Shyam Goteti said at the same time that BMC, whose loss since January 2013 stands at P73 million, would have made a positive turnaround by December 2013, growing their revenue from the current P704 million to P1 billion, which Dr Tombale says will help value the commission satisfactorily. “We really need to capitalise BMC. We are currently using old equipment and machinery, which need a lot of money to be modernised so that we could boost our capacity and even production,” Dr Tombale said.
The BMC plant in Lobatse was constructed in the 1940s, and Dr Tombale said they were experiencing plant failures at times, which slow down production. “In Maun, most of the work is done manually at the plant, so we need to modernise all the plants so that efficiency could be enhanced,” he said. Dr Tombale who took over BMC during its troubled times said that with BMC wanting to vigorously explore and penetrate international high value markets, they need a lot of capital to use in exporting their products and possibly having subsidised BMC operations in such markets. BMC is currently engaged in negotiations
with the Gulf States, including the likes of Saudi Arabia, Dubai, Kuwait, Iraq and Bahrain to sell them meat products. The commission has been making losses since the Foot and Mouth Disease (FMD) outbreak.
In 2009 the losses were P92 million, however they shot up to P129 million in 2010 before intensifying in 2011 and 2012 to reach P233 million and P283 million in that order following the Foot and Mouth Disease (FMD) outbreak that compelled the delisting of Botswana beef from the lucrative EU market, and skyrocketing cost overruns.