CSC clinches Malawian market

THE cash-strapped Cold Storage Company (CSC) has clinched a lucrative deal to export beef to Malawi as markets for Zimbabwean beef open up in the region, The Sunday Mail Business has learnt.

Exports to Malawi are believed to have begun a fortnight ago with the country earmarked to earn millions of dollars in foreign currency.

CSC acting chief executive officer Mr Lazarus Muronza revealed that there has been overwhelming demand from the region and the company has been looking for strategic markets to boost its earnings.

"We are exporting fresh beef to Hong Kong and, in the regional market, we are also exporting to Angola and Mozambique.

"We have just secured another market in Malawi. The export orders from the regional markets are presently overwhelming and we are failing to meet demand as we are seriously undercapitalised.

"To mitigate this problem we have come up with a programme to boost exports by inviting private industry players who will be exporting in partnership with CSC to the regional market," explained Mr Muronza.

The initiative is part of a plan aimed at ensuring the recovery of the industry whose export markets collapsed markedly in the past eight years owing to regular outbreaks of foot- and-mouth disease.

CSC is reeling under massive cashflow constraints that have resulted in the parastatal failing to pay farmers for their cattle.

The parastatal added that the obtaining cash shortages are making it increasingly difficult to transact with communal farmers, who usually demanded cash for their beasts.

It is understood that the commission has since applied for funding from the Reserve Bank of Zimbabwe.

Authorities could not be drawn into revealing how much they had applied for.

Said Mr Muronza: "The amount that will suffice for our programme changes everyday due to the hyperinflationary environment we are in; we require sufficient funds to purchase 23 570 cows and 944 bulls."

Capacity utilisation at the company stands at 20 percent.

Fulfilling export quotas as well as the local market is one of the major challenges facing the CSC.

The resumption of beef exports to the EU remains hazy in the short term as it has emerged that the country needs financial assistance for countrywide vaccinations that are a prerequisite for future trade with the bloc.

"It should be noted that fresh beef exports to the EU have not yet resumed due to the foot- and-mouth disease. Again due to our working capital constraints and reduced uptake of canned product in the EU — which has called for minor modifications to our processing plant — we have suspended exports of canned products," explained Mr Muronza.

The regional market is only taking corned beef while its other products like ox tongue can only be sold on the United Kingdom (UK) market.

CSC is currently struggling to sustain operations, especially in the wake of the hyperinflationary environment that continues to bloat operational costs.

The beef producer is, however, in the process of exploring alternative markets in both Africa and the Far East and further diversifying its products.

On the last visit by the Malaysian veterinary officials, a number of issues were raised that needed attention by both CSC and the Department of Veterinary Services.

Experts are confident that the latest steps being taken by the RBZ to boost the beef herd would result in a turnaround of the CSC fortunes in the long term.

The future of the country’s beef industry depends on the rebuilding of the national herd with the company engaging Government last year with the intention of boosting capacity utilisation to satisfy newly established markets.