Thursday, May 23, 2024

Alcohol levy kills government investments

The value of the listed shares at Sechaba Holdings has declined significantly, Botswana Development Corporation (BDC) reports. The identified root cause of the decline in Sechaba’s performance is the introduction of the alcohol levy last year.

Sechaba Holdings is known as the entity that owns 60 percent of Kgalagadi Breweries Limited (KBL) and Botswana Breweries Limited (BBL)ÔÇöthrough Botswana Development Corporation.

In BDC’s financial report for the year 2010, Board Chairman Solomon Sekwakwa said that the negative impact of the alcohol levy has resulted in book net value loss on available-for-sale financial assets to the corporation of 103.1 million pula.

Sekwakwa revealed that the corporation was vigilant enough to ensure that they didn’t sorely rely on income from a single entity. He added that the corporation has continued to show resilience despite very trying times.

“The various group of companies, which continued to make profits despite the negative impacts brought about by the global recession deserve to be commended,” said Sekwakwa.

There has been a 5 percent growth in the group revenues for both continuing (282.6 million) and discontinued (171.4 million) operations, which totaled P454.1 compared to the year 2009, which had total group revenues of P431.5.

The companies that he listed as profit makers for the year 2010 were Lobatse Clay Works (9.7 million), Cresta Marakanelo (22.9 million), Commercial Holdings (5.7 million), Fairground Holdings (9.7 million) Malutu (5.1 million) Residential Holdings (6.8 million) NPC (4.6 million).
The Associate companies that made profit were Asphalt (20.3 million), Global resorts (84.6 million), Metropolitan (47.9 million), Investec (20.6 million) and NBC (13.3 million).

He also revealed that the number of group companies under BDC continues to grow. The major project that is currently under implementation is the Glass Manufacturing Project, which is a partnership between BDC and a Chinese company. The project comes at a total cost of P539 million and it will produce float glass for both domestic and export markets. The construction of the key buildings is expected to be completed by the end of 2011.

According to the Managing Director of the corporation, Maria Nthebolang, issues concerning economic diversification and citizen empowerment remain high on the corporation’s agenda. She said that this is mainly because they are focused on employment creation, the growth of the private sector, sustainable development and sustainable economic growth.

Nthebolang revealed that at national level, the BDC group paid a total of 46.4 million in corporate taxes and declared a dividend of 33 million pula to the government of Botswana in 2010.

“The corporation also actively invests in projects which ensure employment creation and continuously supports business ventures, which stimulate growth in different sectors such as agriculture, industry and property to ensure diversification of the economy,” said Nthebolang.
In reference to BDC’s latest investments and divestments, Nthebolang said the corporation‘s total assets continue to grow at a healthy rate. She said that in 2010, the assets had reached P2.13 billion as opposed to P1.56 billion in 2009.

“This 37 percent growth is mainly a result of the increased cash resources which the corporation has generated through its divestment exercise,” said Nthebolang.

In June 2010, BDC reduced its shareholding in Cresta Marakanelo entity from 60 to 25 percent with all the divested shares going to citizens and citizen companies.


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