THE Cold Storage Company (CSC) is set to commence a major retooling exercise during a shutdown period as the firm gears for re-opening, an official has said.
The company will also replenish its infrastructure during the period. Last year, CSC signed a US$400 million Joint Venture Farming Concession Agreement with Boustead Beef Zimbabwe, a vehicle sponsored by a United Kingdom investor. Boustead Beef Zimbabwe will take over and manage CSC ranches for an initial period of 25 years.
The company, which owns four abattoirs, used to employ 1 500 permanent workers and about 700 casual workers, thereby making it one of the country’s biggest employers.
While the revival of the company is moving at a snail’s pace considering the initial time lines that had been provided by the investors, consultant Mr Reginald Shoko said the retooling programme will begin soon.
It will go on until January 2020. The company has since sent its employees on paid leave.
“It’s being expected that during this shutdown period, we will be able to retool the plant, which has not been fully maintained in the past 15 years,” said Mr Shoko.
“We have ordered and paid for CSC’s rehabilitation equipment,” he revealed.
CSC has been facing some challenges, including working capital constraints and stiff competition from private abattoirs. The company had enjoyed a virtual monopoly since 1937 when it was formed.
Government then deregulated the industry in 1992 after the adoption of the Economic Structural Adjustment Programme (ESAP), thereby opening up competition from private players. This plunged the company into viability crisis following a sharp decline in cattle throughput.
Only a year after the deregulation of the industry, the company had lost 50 percent of its market share to private players. Apparently, CSC had not been financially capacitated to withstand competition.
The company then largely survived on European Union (EU) exports since it had a US$15 million revolving payment facility with the bloc. CSC had an annual quota of 9 100 tonnes and used to earn at least US$45 million per year from the EU export quota.
The facility was, however, discontinued when the EU suspended imports in 2001 following an outbreak of foot-and-mouth disease. Efforts to enter Asian markets did not materialise after some food safety standards concerns were raised. Mr Shoko said once operations resumed, the company would start exporting to Europe.
“We have secured markets in the EU and once the company is functional, we will be exporting most of our products to various countries around the world,” he said.
Mr Shoko said poachers had been causing havoc at some CSC ranches. However, this problem had been resolved.
In light of the rolling power cuts, the company intends to set up a 3MW solar plant to power its operations.
“The solar equipment is already on its way. It has been released from the Durban port,” he said. “The engineers who are responsible for the development of the 3MW solar project are now on site.”