21 Mar 2024

 Botswana Meat Commission (BMC) is presently technically insolvent, Assistant Minister of Agriculture Mr Molebatsi Molebatsi has said.

Mr Molebatsi who was answering a question in Parliament on behalf Minister of Minister of Entrepreneurship, said BMC had lost an accumulated loss 1.549 billion as per the audited financial statements for the year ended December 2022.

He, however said audited results for the year ended December 2023 were not yet released but were expected to show a favourable trend. 

“While BMC has not yet returned to profitability, there has been improved performance in terms of revenue, gross profit and throughput between the 2022 and 2023 financial years,” said Mr Molebatsi.

He said this was premised on the four year turnaround strategic plan called MERITING 2022/25.

“This strategy focuses on stemming the financial losses, lessening operational inefficiencies through the improved logistics of acquiring raw material or throughput, as well as addressing plant and process maintenance more cost effectively,” he said.

 Mr Molebatsi said the overall turnaround efforts entailed optimising product sales as well as seeking to extract better value from all the commission’s assets.

 He said despite this turnaround plan encountering many trade hurdles such as the outbreak of the Foot and Mouth Disease (FMD) in the July 2022 at zone 6B and an incident of product recall from Norway in January 2023, plus the intermittent global supply chain constraints associated with shipping, the strategy was delivering.

“BMC continues to record positive revenues and improved throughput levels, and is gaining access to fast growing lucrative markets such as the United Arab Emirates (UAE),” he said.

Mr Molebatsi said BMC did not have outstanding balances owed to its creditors for the period 2019 to 2022.

However he confirmed that since then, there was a total outstanding balance of P98.9 million owed to creditors.

“Out of this P67.7m or 68 per cent is owed to farmers, while P31.2 million or 32 per cent is owed to a variety of suppliers including utilities and packaging materials.

“The performance of the BMC has improved since the implementation of the 2022/25 turnaround strategy effective January 2022. The improvement is expected to continue in the current financial year (2024) and beyond. The improvement will further be boosted by the recent penetration of the AUE market,”he said.

Mr Molebatsi said there was a recent contract, which had been signed with Ethiopian Airlines to move products to external markets more quickly.

“This is a risk-minimisation intervention aimed at improving product distribution turnaround times. Payments from customers will be quicker. This will go a long way in facilitating the realisation of the standard set for farmer’s payments,” he said.

 He said the commission was engaged in varied projects to resuscitate its performing assets such as the Cannery, Tannery, Real Estate as well as subsidiary companies.

“To this end a budget provision of P390 million, which comprise of P160 million for the revitalisation of the tannery, and P230 million for the development of the Value Addition and Secondary Processing Plant Project is planned for all Capital Expenditure requirements in the current and next financial year 2024/25,” said Mr Molebatsi.

In the meantime, he said Batswana continued to get value for their livestock through the varied value-added services and benefits of selling, or marketing cattle through the BMC.

“These include free transportation across the country since November 2022 for non EU designated suppliers,” said Mr Molebatsi, adding that BMC had also increased cattle purchase prices more than twice and as such for EU eligible cattle the BMC offered the best rate within Southern Africa, at P45 per kilogram.

Nkange MP, Dr Never Tshabang had wanted the Minister of Entrepreneurship to update the house on the financial status of BMC, the amount owed for each year since 2019 and the cumulative amount owed to date.

He also wanted to be appraised on whether the current financial year had a promising turn around and further wanted the minister to elucidate if he is in a position to resuscitate the commission and if Batswana have been getting value for their livestock from BMC.  ENDS