In one of the radio shows that he featured on soon after taking over as Botswana Meat Commission Chief Executive Officer, Dr. Akolang Tombale, recalls taking a call from a listener who expressed serious doubts about whether someone with a mining background could lift an abattoir from the doldrums.
“My response to him was that I am a leader. I’m not here to process meat; I’m here to lead the company. The problem here was basically leadership. What I’m doing is to get people to do certain things, even those they may not like to do,” Tombale says three years after the fact.
BMC’s major market is the European Union which has unusually stringent health standards that the Commission has to comply with. Following an EU directive which made it mandatory for beef exported to its markets to be identifiable and traceable from farm to fork through a computerised system, Botswana introduced the costly livestock identification and traceback system (LITS) in 1999. Some 12 years later, the government delisted from the EU of its own volition in order that it could perfect LITS. This happened to have been in the middle of the global recession which hit the west the hardest and understandably, this was not a good time for BMC. The situation should have improved in July 2012 when the Commission relisted with the EU. However, some 100 tonnes of BMC beef were recalled when they were found to contain a banned growth-enhancing hormone called salinomycin. It was into this crisis that Tombale, a former Permanent Secretary in the Ministry of Minerals, Energy and Water Resources, came in as CEO.
BMC stayed off the EU market between September 2012 and January 2013 while it got its house in order with Tombale at the helm. For the duration of this self-imposed exile, the company diverted beef exports from 20 000 slaughtered animals to South Africa whose prices are much lower. At this point, the Commission’s finances were in very bad shape.
Tombale’s first notable action as BMC CEO was to introduce what he terms “the infamous livestock purchase agreement” which proved very unpopular with farmers. In terms of this agreement, suppliers bear responsibility for ensuring that they adhere to EU standards and where they fail, are required to pay for their mistakes. Initially, there was fierce resistance from farmers but BMC stood its ground. Tombale says that although they later modified the agreement “a bit”, its core remains intact.
While suppliers may not have been too happy with the agreement, the EU was. Following the beef recall, an EU delegation visited Lobatse as part of process to normalise business relations. Tombale said that when the EU representatives asked how BMC could reassure them that it was taking appropriate steps to prevent a repeat fiasco, BMC management showed them copies of the agreement which the former are said to have expressed satisfaction with.
Around this time and partly as a result of effort to regain its market position, BMC was spending a lot of money on marketing. Tombale’s appraisal of this function was that generally, it was not making returns on its investment. The answer to this problem was to be found 922 kilometres away, on the other side of the Botswana-Namibia border. Following a benchmarking trip to Meatco, a Windhoek operation similar to BMC, the two companies decided to align their operations.
“In terms of the European market, our products are very small. We have about the same number of cattle and are therefore not competing with each other,” Tombale says.
The relationship-building that resulted from this engagement led to BMC engaging the services of Global Plotting Solutions, a United Kingdom company that has been marketing Meatco’s products for years. Tombale says that this company is now marketing BMC products, especially in South Africa and Europe.
Coming into BMC, Tombale found a situation where feedlotters were given financial assistance that the company could ill afford. All along the arrangement was that the Commission assisted them with loans to set up and run a feedlotting operations, placing greater risk on the former than the latter. Tombale says that because of where BMC was financially, this arrangement was untenable. However, that didn’t change a situation where the Commission needed feedlotters who in turn needed financial support. The solution was to negotiate with banks to take up the financing of feedlots while BMC acted as the guarantor.
“We assured the banks that we will buy the cattle from the feedlots,” Tombale says.
The result was that banks are the ones that now give suppliers loans to operate feedlot and the new arrangement has eased financial pressure on BMC.
On the whole, eliminating inefficiencies in the system has helped the Commission save money. Tombale cites the example of how sloppiness on the part of some employees used to come at great cost to the company. Policy and practice is that animals with bruises or more than one bolus are disqualified for the EU market. Owing to lack of vigilance on the part of some gate-keepers, meat so downgraded would be mixed up with that destined for the EU and loaded onto trucks that would take the consignment to Cape Town from where it is shipped to the EU. However, the next gate-keeping level would expose this mistake and an entire truck would have to be offloaded and the trip delayed.
“I’m talking about trucks for which BMC paid P10 000 a day. We tightened up the system to eliminate inefficiencies like these that were costing BMC a lot of money,” says Tombale, adding that such effort led to a much more improved financial situation.
Mid-2013 would have given indication that BMC was well on the way to being BMC. The finance director felt confident enough to publicly predict that the company’s revenues would reach the P1 billion mark. A commission of enquiry had been investigating BMC and considering what was coming out during the hearings, this sounded like a joke. The prediction was spot on. The first time the Commission made that amount of money in its history was in 2010 after slaughtering 180 000 cattle; in 2013, it made the same amount having killing 139 000. Tombale says that last December, BMC made P1.1 billion.
However, the picture is not all rosy and that has to do with the way the nature of company business.
“The biggest problem we have is cash flow. We were bankrupt but the way we do business is that we buy cattle almost at cash value. We then put these cattle in feedlots for three months to process them for the EU market. We get paid much later when we would have incurred costs,” says Tombale, adding that last year the government had to intercede on their behalf to secure a bank facility that is keep BMC afloat.
The cost-cutting continues. While BMC still uses the services of feedlotters, it is also in the process of developing its own feedlots. It is also refurbishing its image. Its vision statement has changed from “To be the supplier of choice for quality beef” to “Globally renowned meat and diversified products enterprise.” An African Development Bank report on livestock trade that came three weeks ago out says that while BMC has some of the most sophisticated productive structures in Africa, it is not fully exploiting its potential. It states that Botswana has not done much to export its edible offal meat. At a rhetorical level, at least, the new vision statement is an expression of intent to sell offal meat alongside frozen meat.
Tombale has led a number of ground-breaking negotiations for the country. These include development of the Southern African Development Community Protocol on Trans-boundary Watercourses and founding of the Zambezi River, Orange River and Limpopo River Basin water commissions. He was Chief Negotiator for talks with De Beers that changed commercial arrangements in diamond mining including the relocation of Diamond Trading Company from London to Botswana.
He also led negotiations that developed the independent power producers in the country, and guided creation of policies and procedures for establishing Botswana as a centre for the downstream diamond activities. With a wealth of experience in leadership, he has consulted in water resources, mining, environmental impact, diamond marketing, contract negotiations, performance management and productivity. He holds a PhD in Economic Geology from the Memorial University of Newfoundland, Canada, an MSc in Economic Geology from the University of British Columbia in Vancouver, Canada and BSc Honours in Geology from the University of Ibadan, Nigeria.
