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WE are delighted by revelations that United Kingdom beef processing giant, Boustead Beef (Pvt) Limited, is making rapid progress in its resuscitation of operations at the Cold Storage Company in a development that will see the country’s biggest meat processor revitalised through a Concession Agreement under a Rehabilitate, Operate and Transfer deal. 

Boustead, which is already on site and has begun refurbishing some of the equipment at CSC headquarters in Bulawayo, will inject US$130 million into the meat processor over a five-year period under a joint venture agreement that was approved by Cabinet on Tuesday. 

The money will cover working capital requirements and offset CSC’s debts amounting to US$42 530 597. 

It will cover rentals of US$100 000 per annum during the first five years of the concession agreement. Under terms of the agreement, Boustead will take over and manage CSC ranches at Maphaneni, Dubane, Umguza, Chivumbuni, Mushandike, Willsgrove and Darwendale for an initial period of 25 years.

It will also take over and run CSC abattoirs in Bulawayo, Chinhoyi, Masvingo, Marondera, and Kadoma for an initial period of 25 years while the company’s distribution centres and residential properties in Harare, Gweru and Mutare will now be managed by the UK firm for the same period. 

There are numerous benefits to accrue to Zimbabwe from the deal and these 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.

The CSC will also bring back abattoirs to full functionality, provide raw materials to industry such as fat for soap making, and be in a position to set up out grower schemes. 

In addition, Boustead Beef also plans to export products to countries like China, Botswana, and Angola. In the first year of the deal, Boustead is expected to invest US$45 million, with US$10 million set to be channelled towards the purchase of cattle to replenish stock.

 CSC’s herd had dwindled to 341 animals across the country as at March 2017. In this regard, Boustead has started buying cattle from South Africa and is also looking at restocking through facilities in Botswana. 

It 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 will be installed upon arrival. The investor started paying salaries of CSC employees from February this year and is also cleaning its facilities. Tenants who were occupying CSC ranches without permission have been relocated while illegal hunting on CSC ranches is also being stopped. 

Under the deal, Willowvale Motor Industries will assemble Boustead’s vehicles, creating backward and forward linkages. 

Explaining the deal to journalists during a Post Cabinet Briefing in Harare on Tuesday, the Minister of Finance and Economic Development, Professor Mthuli Ncube, said:

 “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 adding that Boustead Beef is “already on the ground” and has audited CSC’s infrastructure.  

On it’s part, Boustead Beef said in a statement on its website that intends to embark on a rehabilitation and refurbishment programme of CSC facilities, to modernise the full beef process chain, from calf through to plate. 

“Boustead Beef has already procured the equipment required for the refitment of the abattoirs, and cold chain facilities and the first plant should be fully operational within 6 months. Boustead Beef will also refurbish all its ranches, and embark on a restocking programme, and working with local communities, will introduce new DNA into the herds, through breeding programmes. The redevelopment of the national herd is paramount to the success of the beef industry in Zimbabwe,” the company said. 

We welcome Cabinet’s approval of the CSC-Boustead Beef Agreement as it will go a long way in expediting the revival of CSC. The deal dovetails with Government’s parastatal reform programme which is gaining momentum.

CSC is a strategic company in Government’s quest to achieve Vision 2030 and a key plank of the Transitional Stabilisation Programme which seeks to capacitate and reform parastatals so that they are profitable and stop bleeding the fiscus. 

In the long term, Zimbabwe will resume beef exports to the European Union and other key markets and generate much needed foreign currency. 

Meanwhile, local ranchers will have a ready market for their cattle where they will not be ripped off by greedy private abattoirs. The CSC-Boustead deal is therefore a win-win scenario for both the investor (who will recoup his money during the 25-year tenure of the agreement) and CSC which will be restored to its former glory. Zimbabwe is indeed open for business.