BY KABELO SEITSHIRO
The government investment arm – Botswana Development Corporation (BDC) has, after the liquidation of one of its subsidiaries – Fengyue Glass Company been able to retain 100 hectares of land where a manufacturing plant was to operate from in Palapye.
BDC Managing Director – Bashi Gaetsaloe told journalists in the capital Gaborone this week that the Fengyue Glass Company liquidation process went well and that the group has since retained the land.
“We are engaging several investors on how we can utilize the land for manufacturing”, said Gaetsaloe.
On other assets that were owned by the company, Gaetsaloe said BDC was able to partner with Botswana International University for Science and Technology (BIUST) for utilizing the permanent house structures that were built side by side with the plant.
Gaetsaloe’s sentiment comes hardly three years after BDC admitted that the liquidation of the infamous joint venture, Fengyue Glass project worsened its financial position. At the time, BDC board chairman Blackie Marole said that the decision to liquidate Fengyue Glass Manufacturing Botswana (Pty) Ltd led to a full impairment of the group’s investment.
Fengyue Glass Manufacturing Botswana was a joint venture between BDC and Shanghai Fengyue Glass Co. Ltd. The JV was set up in 2007 for construction of a 450 tonne float glass plant in Palapye. BDC said at the time that the project failed to meet its targets, including those of time and budget which affected the viability of the project.
“The Corporation assessed all possible options and, having taken all factors into consideration, has decided that the appropriate course of action is to petition the Court to liquidate the Company,” said BDC at the time of liquidation more than five years ago.
Meanwhile the latest financials from BDC shows that its group Profit before Tax (PBT) has gone up by 39 percent to P187million (2018) (2017: P135 million). Group asset base on the other hand also grew to P4.1 billion in 2018, up 5 percent from P3.9 billion in 2017 while the Group’s income closed the year at P444million against last year P403 million, a 10 percent year on year growth.
The Corporation realised growth in interest income of 20 percent to P42million against prior year P35million reported.
Gaetsaloe says the corporation’s performance was a reflection of the expected growth in debt assets, a milestone achieved in correlation with BDC’s business strategy to rebalance the equity or debt asset profile. He added that BDC successfully drove an increase in investment asset values at Group level with financial results for the year under review reporting an accumulative five percent year on year growth of Group assets to P4.1 billion.
“We have reduced loss making subsidiaries across the group from nine to two and executed new investment in agri-business and manufacturing,” said Gaetsaloe.
Between 2015 and 2018, BDC says it achieved notable successes where the corporation was returned to profitability with P784 million in cumulative profits and also paid-off sub optional debt of P500 million. Gaetsaloe said the managed to transfer P285 million of listed stock to the public and also transferred businesses and assets worth P300 million to local firms.