Botswana Meat Commission (BMC) posted much better results compared to results of 2004.
The BMC, a quasi-government entity that was established to promote the development of livestock industry as well as the country’s beef related products globally, posted a significant turnaround weighed against last year, especially as the turnaround was achieved on a reduced throughput.
The surplus for the year was P19.8 million measured up to a restated deficit of P12.5 million last year, it said in annual report.
The surplus had been retained to boost the depleted reserves, which had a significant impact on the Reserves balances.
Conversantly, the total turnover for the year was P373.5 million, which is 9 percent better that the previous year’s turnover of P344.1 million, making 2005 performance the second best in five years going back to 2001. The latter year was the last time that BMC performance was outstanding having resulted in the declaration of bonus to farmers.
The report stated that the highest contributor to turnover was the United Kingdom, with P110.6 million or 30 percent, followed by Botswana and South Africa with P63.5 million or 17 percent and P54.8 million or 15 percent, respectively. The United Kingdom contributed P17.2 million or 14 percent lower than the previous year’s contribution.
BMC also said that Botswana and South Africa had increased their contribution by P3.0 million (or 5 percent) and P13.5 million (or 33 percent) in that order.
“Moreover Norway and Greece contributed P34.1 million (9.1 percent) and P27.2 million (7.3 percent) and are at positions four and five, respectively.
Although the German market had been difficult, there had been an improvement in 2005 where turnover had improved by 45 percent over that of the previous year. Total sales to this market in the period under review amounted to P17.1 million,” the report cited.
The report also mentioned that producer payments amounted to P162.3 million compared to P177.4 million in 2004, largely because of the decrease in throughput as prices were the same as those of last year. Variable costs head increased from P233 to P260, an increase of 11.6 percent, adding that “fixed expenses rose by 9.9 percent mainly due to one-off expenses amounting to P9 million which includes International Development Ireland (IDI) consultancy costs – when these are discounted, fixed expenses have only increased by 2.9 percent from last year.”
“Since the devaluation, the Pula slightly gained against the currencies of three trading partners during the rest of the year but continued to lose value against the South African Rand. This resulted in an improvement of exchange differences from exchange gains of P1.2 million last year to exchange gains of P5.8 million in the year under review” it cited.
The report mentioned that finance charges rose from P18.4 million in 2004 to P22.4 million by the end of the year. This was mainly due to consistent high overdraft level maintained throughout the year.
Inter company income earned amounted to P14.3 million compared to P9.8 million last year. The largest contributor was Botswana Road Services with dividends amounting to P6 million followed by BMC Meat Importers with P5.3 million from profit commission and dividend.
“In addition chilled vacuum packed boneless beef was the highest contributor with P174.2 million or 47 percent as compared to the previous when contribution was P138.3 million or 40 percent,” the report said.
The other highest contributor was the sale of frozen beef, which amounted to P132.1 million, whereas the previous year it had realized P136.3 million.
Canned products contributed P31.2 million, from the sale of 2,497 tons, an increase in volume when compared to the previous year when sales amounted to P26.8 million from 1,659 tons.
A total of 102,047 pieces of hides were sold in 2005, accumulating a sale value of P16.1 million as opposed to 124,149 pieces sold in the previous year that realized P21.2 million. Italy remains the dominating destination from the wet blue hides.
A total of 6,254 tons of by-products were sold in the period under review and realized P10.6 million, a decline in turnover is noted when compared to the previous year when realization was P12.5 million from the sale of 8,394 tons. The sales value of P1, 695 per ton is however better in 2005 than P1, 490 per ton in 2004. The highest contribution from this product line came from Botswana with 59 percent, South Africa and Zimbabwe with 30 percent and 11 percent respectively.
The total revenue realized from offal’s for 2005 was better that the one realized in 2004, with the total revenue accumulate in 2005 being P9.3 million as opposed to P9.0 million from 2004.
It mentioned that, total throughput for the year was 9.3 percent lower than the previous year, which was the lowest since 1966and the average monthly kill of 9,830 cattle was 27.6 percent lower than the average 13,571 since January 1966. Plant capacity utilization was at 42.75 per cent in Lobatse and 50.6 percent in Francistown.