CSC, Boustead Beef Zim deal boost to economy

The CSC collapsed at the turn of the millennium because of a combination of factors.

The European Union (EU) which imported 9 100 tonnes of beef every year from CSC imposed sanctions on Zimbabwe, a development that denied the company access to one of its highest-paying and most reliable markets. 

Frequent outbreaks of animal diseases, especially foot and mouth made locally produced beef unattractive in foreign as well as local markets. 

Management at the CSC has been blamed for contributing to the collapse by failing to properly run the giant parastatal. 

This resulted in losses mounting. 

Competition that arose after the beef processing and marketing industry was liberalised worsened the parastatal’s viability challenges.

It was therefore not surprising that the CSC became a pale shadow of its former self with its abattoirs in Bulawayo, Masvingo and Chinhoyi becoming white elephants operating at less than 10 percent capacity, or not at all.

According to a 2016 report by the Parliamentary Portfolio Committee on Lands, Agriculture, Mechanisation and Irrigation Development the parastatal’s large ranches held only 792 head of its cattle then, with leasees ironically keeping tens of thousands of cattle on the farms.

The report also said out of a total of about 77 000 national slaughters in the first quarter of 2015, CSC only slaughtered about 5 000 animals, a measly 7,3 percent of the total.

Then, the company was saddled with a debt of more than $28 million, mainly to public utilities such as Zesa. It owed employees about $3,5 million for wages.

At some point, its employees won court orders allowing them to seize CSC-owned houses and farms for auctioning for them to get paid. 

In between, efforts to revive the CSC appeared to fail as soon as they were mooted.  For example, there was a planned investment from Botswana.

No one knows what became of it.

A few months ago, there was word to the effect that the National Social Security Authority (NSSA) was looking to invest $18 million in CSC but that proposal went the way of the Botswana one.

However, a weekend report by our sister paper, Sunday News, says the CSC could soon get back on its feet after Boustead Beef Zimbabwe clinched an agreement to invest US$400 million in the firm over the next five years.

Boustead Beef Zimbabwe is a local unit of Boustead Agriculture, a United Kingdom-based company engaged in a range of farming operations and processing.

Boustead Beef Zimbabwe managing director Mr Nick Havercroft said machinery worth about US$16 million has been bought and is awaiting delivery to the company’s headquarters in Bulawayo.

The company, he said, is also repairing infrastructure at CSC’s ranches in Masvingo and Matabeleland region. 

More importantly, off-take agreements have been signed for beef exports to Africa and Asia.

“Over the first five years we were focused on US$130 million but we have secured more markets and we are focusing way over US$400 million over the next five years, a lot of that is obviously for securing the beef. We have very good finance, very good offtakes for the beef export orders. Our focus is going to be higher than what we had actually planned so our investment is going to be bigger than what we had anticipated.  . . . We have secured orders into Angola, Dubai and China, so with demand for the beef we are going to be increasing our investment from obviously what we thought it was going to be,” said Mr Havercroft.

The weekend announcement came after the Government announced in November last year that Boustead Beef would use CSC assets and part of the agreement will see the investor refurbishing CSC abattoirs.

The farms, abattoirs and all those assets will remain CSC property.

This is really good news that a deal has now been struck.

We want to believe that this will not count among the old promises that ended as soon as they were made.

Creditors, including workers, most of whom had lost hope for recovering their monies from the CSC, should be delighted with the latest turn of events because the new investors have agreed to pay them.

We are happy too because CSC is a national asset, commonly owned by all Zimbabweans, that was dead for almost two decades but is now reawakening. 

A revived CSC will bring a new dimension to beef production, processing and marketing on a market that had been dominated by a few private players. 

We foresee healthy competition returning for the benefit of cattle producers in the rural areas and on farms, suppliers of various requirements to the parastatal and the beef consumer. 

Competition is known to result in prices of products and services becoming more competitive.

This should happen to beef as well.  

It is every citizen’s hope that indeed, Boustead Beef Zimbabwe will succeed.

Why not given the roaring success we have seen in the smart partnerships at the Agricultural and Rural Development Authority (Arda). 

Arda was as dead an asset as CSC, but since the Government allowed private investment into the parastatal a few years ago, Antelope and Ingwizi estates in Matabeleland South, Balu in Matabeleland North and Fair Acres Estate in Midlands Province and others elsewhere across the country, are now some of the country’s biggest of maize and cattle producers and, in the near future, big producers of new, high value export crops such as pecan nuts.  

With Boustead Beef Zimbabwe in the fold, the CSC, we believe, is firmly on its way back just like Arda has risen on the basis of private investment.