THE Deputy Ministers of Agriculture, Mechanisation and Irrigation Development yesterday told the management and board of the Cold Storage Company (CSC) in Bulawayo that the Government would no longer bail out the parastatal if it failed to attract investors.
In a tense meeting at the company's boardroom, The Deputy Minister for livestock development Paddy Zhanda and Deputy Minister for cropping, mechanisation and irrigation Davies Marapira were told that CSC requires $58 million for recapitalization, last year it made a loss of $10 million and has already made a $3 million loss in the first half of this year
The visiting ministerial delegation said it was sad that CSC has been overtaken by private operators when it was expected to be the strategic livestock development engine in the country.
CSC is swimming in debts of up to $22 million owed to different creditors and has a salary backlog amounting to $2, 1 million.
The company is operating at seven percent capacity utilisation and has a skeletal workforce of about 500 workers compared to 1500 in 1999.
Zhanda said the Government would not continue to pump out money on underperforming parastatals that are failing to declare a dividend
"What is happening at CSC now is a sad story and CSC has become a monster. This requires a strong board that will transform the direction of the company," said Zhanda.
He said although the economic environment was harsh for all companies, CSC management and the board should shoulder much responsibility for their fate.
He said the company should have forged partnerships with private players way back in order to preserve its viability instead of enjoying the comfort of monopoly.
Zhanda said Government will not protect CSC just because it is owned by the state as it has a broader mandate to protect all citizens including downstream industries.
He challenged management to utilize the assets it has to turn around its fortunes.
"You need to change your mindsets and restructure yourselves quickly rather than wait for the Government to think for you because you are the ones who feel the heat. There is no need to live in history because you have a business to run," said Zhanda.
He said several people have approached his offices soon after appointment to the ministry saying they have submitted proposals seeking to work with CSC but have not found any joy.
Zhanda ordered the CSC management to immediately open its doors and engage private players who would enhance the company operational efficiency.
His counterpart, Davies Marapira, also said CSC should vigorously overhaul its operations to fulfill its mandate.
In his presentation CSC executive officer Ngoni Chinogaramombe said CSC was struggling to raise working capital to support farmers and cited loss of export market, decline of the commercial herd and underutilisation of its assets as major challenges.
He also said the company was failing to service its debts, a situation that has led to mounting litigations.
The major creditors are utilities, statutory bodies, cattle suppliers and loans for capital expenditure.
CSC was formed in 1937 as a parastatal that was 100 percent owned by the Government to promote growth of a vibrant beef industry.
The meeting was also attended by senior ministry officials and representatives of farmer's organisations.
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bulawayo24.com
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