CABINET has approved a joint venture between the Cold
Storage Company (CSC) and a United Kingdom firm, Boulstead Beef (Pvt) Limited,
which will see the investor injecting US$130 million into the meat processing
firm.
This was said by Information, Publicity and Broadcasting
Services Minister Monica Mutsvangwa during a post- Cabinet Press briefing
yesterday.
“Cabinet was informed by Finance and Economic Development
Minister Professor Mthuli Ncube that the CSC is to be revitalised through a
Concession Agreement under Rehabilitate, Operate and Transfer (ROT) terms,”
said Minister Mutsvangwa.
She said under the agreement, Boustead would “raise and
invest a minimum of US$130 million into CSC over five years”. The funds will be
for capital expenditures and working capital for the business.
It will also pay off CSC’s financial debts totalling US$42
530 597 and pay rentals of US$100 000 per annum during the first five years of
the concession agreement.
Boustead will also take over and manage CSC ranches in
Maphaneni, Dubane, Umguza, Chivumbuni, Mushandike, Willsgrove and Darwendale
for an initial period of 25 years.
Minister Mutsvangwa said Boustead will take over and run
CSC abattoirs in Bulawayo, Chinhoyi, Masvingo, Marondera and Kadoma for an
initial period of 25 years.
It will also take over and manage CSC’s distribution
centres and residential properties in Harare, Gweru and Mutare for the same
period.
Minister Mutsvangwa said the benefits to accrue to Zimbabwe
from the investment agreement include, “increased capacity utilisation at CSC
ranches and abattoir plants; increased prospects for restoration of the
enterprise’s viability and higher throughput; stemming of further deterioration
of equipment which is currently lying idle, and the growth of the local
livestock and beef industry.”
Asked if 25 years was not too long while CSC was being
operated by the private investor, Prof Ncube said the period was sort of a
standard across the world, and can stretch to 35 years, since they are funded
by debt.
Prof Ncube said 25 years would allow the investor to recoup
their US$130 million and then give the CSC back to Government.
He said there are numerous advantages which include
bringing back abattoirs to full functionality, providing raw materials to
industry such as fat for soap making, and setting up out-growers.
Boustead Beef also plans to export products to countries
like China, Botswana, and Angola, said Prof Ncube.
“So the benefits are incredible for the economy. We are
happy with the progress so far and as Government are supporting them to make
sure that they can really resuscitate CSC to its former glory,” said Prof
Ncube.
He explained that Boustead Beef is “already on the ground”
and has audited CSC’s infrastructure.
In the first year, Boustead is expected to invest US$45
million, with US$10 million set to be channelled towards the purchase of cattle
to replenish the stock. The herd had dwindled to 341 animals across the country
as of March 2017.
Boustead will invest US$6 million into abattoirs’
refurbishment, canning factory, distribution infrastructure, working capital
and IT systems while US$500 000 plant equipment has been ordered and paid for.
The equipment is ready for shipping and would be installed
upon arrival. The investor has started paying employee salaries from February
this year and is also cleaning its facilities.
Boustead has also started buying cattle from South Africa
and is also looking at restocking through facilities in Botswana, while some
tenants who were occupying CSC ranches without permission have been relocated.
Illegal hunting in CSC ranches is also being stopped. Willowvale
Motor Industries would assemble Boustead’s vehicles, creating backward and
forward linkages.
The revival of CSC is in line with the Transitional
Stabilisation Programme which seeks to arrest the rot in most parastatals.
Chronicle
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