Musa Makina
IT might come across as a fictional novel humbug, but, in Bulawayo, the Cold Storage Commission (CSC), which was one of the largest meat processors in southern Africa, is now popular for hosting a much loved drinking joint.
Inside the company’s complex, located on the outskirts of the central business district, one of its sections has been turned into a beer binge centre, with lagers of all types, whiskey and champagne on display.
During this Covid-19 induced lockdown, imbibers continue trekking to the usually ever packed CSC, as it is one of the few safe drinking joints, where no police and army raids are conducted after the curfew.
“It is both drink and braai so it’s a place of choice in town,” said one regular imbiber Makhosi Mdawini, who sells cellphone accessories in the Central Business District, oblivious of the fact that the same venue could be his place of work, had all things being equal.
The CSC, headquartered in the second largest city, used to be an employer of choice, taking in over 4500 employees.
Not only that, the centre was one of the biggest meat processing companies in Africa and supplied the European Union, as its meat products were most sought after.
CSC’s Bulawayo complex is the largest meat slaughtering facility in Africa and only trails Botswana Meat Commission in terms of the latest technologies.
At its peak, the beef processor and marketer used to handle up to 150 000 tonnes of beef and associated by-products annually and exported to the EU, where it had an annual quota of 9 100 tonnes of beef.
The Zimbabwean government, which is the major shareholder, played a big role in the collapse of the entity, through its dilly dallying on courting potential investors.
CSC, just like other once thriving companies like National Railways of Zimbabwe, Zisco Steel and Bata has always been subject to politicking, where senior Zanu PF officials and the opposition parties use them as election campaign trump cards.
Three years after President Emmerson Mnangagwa assured the nation that CSC problems were going to be resolved, the situation on the ground proves otherwise.
In June this year, the government cancelled the much touted multi-million deal with Boustead Beef (Pvt) that was meant to resuscitate the meat processor and was signed in March 2019.
Under the deal, the UK investor was to inject a total of US$400 million over the next five years to revive the company that had been dormant for the last two decades.
Boustead Beef (Pvt) was also to finance the rehabilitation of some CSC farms, where cattle fattening used to take place.
Following that, Lands and Agriculture minister Anxious Masuka won a High Court case which brought the company under corporate rescue, and resulted in Ngoni Kudenga of BDO Zimbabwe Chartered Accountants being appointed corporate rescue practitioner.
Recently ,the government announced in a public notice that: “All stakeholders, creditors and debtors of Cold Storage Company P/L, please be advised that the Ministry of Lands, Agriculture, Water and Rural Resettlement filed an application in the High Court of Bulawayo, HC1779/20, and obtained an order to place Cold Storage Company P/L under a corporate rescue plan in terms of the Insolvency Act (Chapter 6:07) Section 124.”
Not surprisingly, in his court submissions, Masuka agreed that the meat processing company was drowning in a sea of challenges which also included corruption among them.
“It came to light that there continues to be rampant corruption and awful dissipation of assets by certain executive members, board members, and government officials of CSC. More than 10 000 head of cattle have been misappropriated in the government cattle heifer breed scheme,” claimed Masuka.
Masuka also claimed that workers at the company sabotaged the new investor, something that has since been vehemently dismissed by the workers at the institution.
“Certain employees have been extremely obstructive and uncooperative in respect of the applicant’s attempt to implement the revival of the company. Their conduct has amounted to sabotage,” said Masuka.
The concerned workers angrily reacted arguing the minister was simply trying to cover up for a failed investor.
“We as non-managerial workers are disturbed with the application made by the Minister. The founding affidavit implied that workers sabotaged the government efforts to revive CSC. The truth needs to be told workers cannot be used to cover up for a failed investor and government mistake to carry out due diligence,” a joint letter by CSC concerned workers said.
“We were more than happy to have an investor even before we knew when an investor was coming. We were told we could not bargain our salaries as it would scare any investor coming due to a huge wage bill and outstanding salaries.”
Economist, Anglistone Sibanda opined that the challenges at CSC are indicative of the broader governance issue in the country.
“The same challenges are faced by all parastatals and what needs to be done is to simply sell the company or let the farmers come together and take over the company, in particular Matabeleland Cattle farmers,” said Sibanda.
“It (CSC) has been affected by corruption and competence issues. Corporate governance is a big challenge and the government needs to do something about it. The public utilities corporate governance Act is not being adhered to and nobody cares. We need to consider a new model of running such institutions,” he added.
While Reginald Shoko, CSC’s corporate communication manager was optimistic, saying that everything is in order for the parastatal resuscitation.
“The application of corporate rescue is an agreed position between the parties (Boustead beef and government of Zimbabwe) of Joint Venture agreement to facilitate full implementation of the agreement after the challenges faced by the investor in his work to resuscitate the CSC as mentioned in the affidavit and application documents,” said Shoko.
”We believe this will help fast track the full implementation of the CSC deal. It’s important to appreciate the challenges faced by many state enterprises in terms of corporate governance. The corporate rescuer practitioner it’s expected to clear most of the challenges and also address legacy issues around the CSC as a company,” added Shoko.
CSC has been struggling to sustain profitable operations over the past years and faced the risk of liquidation as creditors demand their dues.
Mounting debts and accusations of poor management and alleged corruption among other factors, dragged the company into insolvency, with increased risk profile making it difficult to attract fresh investment or working capital.
CSC creditors include urban councils (Harare, Bulawayo and Chinhoyi), National Social Security Authority (NSSA), and the Zimbabwe Electricity Transmission and Distribution Company, are demanding immediate settlement of the arrears.
However, renowned economist and lecturer at the National University of Science and Technology (NUST) Nqobizitha Dube admits that CSC is now a pale shadow of its former self as he proffered some solutions.
“Whoever is to invest in the revitalisation of CSC has to do so with long term interests in mind. As such, it would ideally be the government to do this, maybe supported by a national crowd funding initiative which is more ideal for a country under sanctions or turning to international loans which are currently in short supply,” noted Dube.
“The CSC mandate needs to be publicly reconstructed and re-clarified in line with current conditions and it is critical to realise that we won’t have yesteryear CSC overnight as such gradual growth objectives that are reviewed periodically are required together with utilisation of resources in the short-term for the highest impacts. Such would include the pursuit of domestic, regional, continental then global markets,” he added.
