Oliver Kazunga, Senior Business Reporter
THE Cold Storage Company (CSC) has identified a United Kingdom-based investor set to inject $100 million into Zimbabwe’s largest beef processing firm.
The ailing State-owned entity, which requires between $60 million and $100 million to revamp its operations to competitive levels, has a debt overhang amounting to over $25 million.
CSC’s viability nose-dived from year 2000 owing to a host of challenges such as inadequate working capital, cattle diseases and decline in the commercial herd, huge foreign debt, high staff turnover and an old transport fleet.
Its challenges worsened at the height of sanctions that were imposed on the country by the European Union (EU) in recent years.
Speaking during a meeting organised by the Bulawayo Special Economic Zones technical working group at the Large City Hall on Tuesday, CSC marketing director, Mr Isaiah Machingura, said:
“There is an investor from UK (United Kingdom) who wants to invest $100 million into CSC and the deal has already been approved by Cabinet.
“They (UK investor) already knows what is happening regarding the establishment of the Special Economic Zones and they ask whether we (CSC) are also part of that.
The CSC is one of the 12 State entities the Government has earmarked for speed recovery under its parastatals reform initiative.
At its peak in the 1990s, CSC handled up to 150 000 tonnes of beef and associated by-products annually and exported to the EU. Early this year, the National Social Security Authority announced that it was planning to inject $18 million to revive the ailing beef processor and marketer but the deal seems to have collapsed.
The transaction was expected to see the authority acquiring 80 percent stake in the parastatal with Government retaining 20 percent. It is envisaged that the joint venture agreement between CSC and the potential investor would basically involve the running of the parastatal’s abattoirs dotted across the country.
It is also hoped that under the joint venture arrangement, the prospective investors will run CSC’s ranches with a possibility of an out grower scheme dealing directly with livestock farmers.
The parastatal is also planning to resume exports to the EU once it begins operating competitively.
The CSC which used to have an annual beef export quota of 9 100 tonnes to the EU, suspended the exports to the lucrative market more than a decade ago.
The firm has the capacity to slaughter more than 700 animals a day and do the deboning and packaging before exporting. — @okazunga.