THE demise of the Cold Storage Company (CSC) had negative ripple effects to the downstream industries culminating in the closure of hundreds of companies, an official has said.
Leather Institute of Zimbabwe chairman Mr Cornelius Sunduza said a number of companies that relied on byproducts obtained from CSC were forced to fold as the company's fortunes took a tumble.
He said this at a Competition and Tariff Commission workshop on the study of the Zimbabwe beef industry held in Bulawayo on Tuesday last week.
"The CSC is called an A-abattoir. It means it has capacity and installed infrastructure to utilise a beast with all its byproducts, recover all the benefits that come out of the animal for instance . . . the fifth quarter including blood and various other products. The private abattoirs don't have that capacity to process the products but throw them away as effluent. So we are literally throwing away not only income but employment generation," said Mr Sunduza.
He said about 400 small to medium enterprises and individual soap manufacturers in various parts of the country were forced to close shop due to decreased volumes of tallow obtained from CSC.
Tallow is basically animal fat rendered for soap making, and many soap makers still use tallow in their recipes.
"You need fat to manufacture the soap, at the present moment we are importing. There were about 400 soap manufacturers of the green bar they just disappeared and we were now importing green bar. We are also importing bone meal or stock, which is used for feeding cattle because CSC doesn't have the capacity to supply.
The country's soap manufacturers are exporting tallow from South Africa, Namibia and Botswana.
"The number of industries that were affected by the closure of CSC is many and CSC to Matabeleland is a strategic centre or the heart to turn around the industry. So the revival of CSC is not just for the cattle, it is for the downstream industry including the leather industry. If it collects the hides they will be cheaper," said Mr Sunduza.
He also said a local button manufacturing company also obtained hooves and horns from CSC for the production of buttons.
Agriculture, Mechanisation and Irrigation Development Deputy Minister Paddy Zhanda who is responsible for livestock production said one of the reasons the Government was eager to revive CSC was due to its pivotal role it plays in the country's economy.
"As Government we are so eager to see CSC operating again because we do recognise the immense benefits it has on the downstream industries of Bulawayo and the entire country. These are soap and stock feed manufacturing, leather industry among others. So the opening of CSC really has huge benefits on the downstream industries in Matabeleland," said Dep Zhanda.
The company's demise started in 2001 after the European Union suspended imports of beef and related products from Zimbabwe following an outbreak of Foot and Mouth Disease. The company has also been hit hard by illegal sanctions by the West on the country.
The company is now surviving mostly on slaughter fees and rentals it receives from leasing its properties. Its slaughter rate has been on a free fall over the last decade and are half down from 50 000 to below 2 000 cattle per month. Earlier efforts to revive the company failed.
However, Dep Minister Zhanda said Cabinet had approved investment of $18 million towards the revival of the CSC by the NSSA.
He said a few issues regarding the Scheme of Arrangement with creditors were being finalised ahead of the commencement of business at CSC next month.
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