Monday, September 28, 2020

BMC suffers losses as it tries to prop-up beef  sector

Botswana Meat Commission (BMC), the country’s abattoir operators, said it recorded a shocking loss of P 87.5 million, blamed on the global economic crisis and it’s trumped up price war, aimed at wooing farmers to its side.

The full year results, to December 31, 2009, indicate that  the company suffered P 87.5 million loss  after tax remissions of P 24.8 million.

Chief Executive Officer of BMC, Dr Motshudi Raborokgwe, told The Telegraph this deficit had been recorded after a tax remission of P24.8m from Botswana Government and before appropriations to reserves.

BMC runs three abattoirs in Francistown, Maun and Lobatse and its primary beef markets are the lucrative  European Union  markets.

However, Dr Raborokgwe said despite the operating deficit recorded over the year, the  company has made good long terms-investments by  trying to revolutionarise the sectors and endearing the farmers to it.

“It has facilitated the conversion of the sector from an oxen production to a weaner or feedlot production system, which is well underway,” he said.

One of the things that were introduced by the company was the direct purchase scheme, which was geared to compete with the butcheries for livestock.

Further, Raborolgwe said that the direct cattle purchase and contract feedlotting schemes had gone off to a good start. As such he encouraged farmers to sell their cattle as weaners for feeding, which is expected to speed up the production cycle.

Dr. Raborokgwe said the Foot and Mouth Disease scourge of October 2008  had a direct impact on the operation of  his business as it led to abattoir closures.

“FMD kept Ghanzi cattle closed to BMC till March and went into the first quarter with little product to sell,” he said.┬á

“The recession impacted negatively on beef prices in the main EU markets with beef prices collapsing by as much as 25 percent┬á in the second half of the year,” he said.

BMC took a decision not to reduce producer prices during the year in order to stimulate the sector. This saw farmers being paid high prices for their cattle in the face of falling market prices of beef.

However, Raborokgwe valued this decision saying “high prices paid for cattle in 2009 have created unprecedented stimulus and incentive for beef cattle producers and have acted as a much needed catalyst for the growth and enrichment of the cattle production industry as a whole”.

The good prices paid to farmers resulted in a financial benefit for farmer’s rural economy and Botswana economy when the global financial crisis was at a peak.

He said that cattle kill for 2009 was 135,286 with an average of 209kg per head, which he said is an improvement compared to the 113,288 cattle killed with a 203 kg average per head achieved in 2008.

He noted that farmer payments in 2009 were at P522.7 million with an average of P3.863 per animal, which was better than the P317.7 million or average of P2, 804 per animal paid in 2008 ÔÇô representing┬á a price increase of 38 percent┬á year on year.

Following the loss that wiped out all the commission’s reserves Raborokgwe said “we want to make 2010 a better and profitable year for BMC, ending the year in surplus”.
He commended farmers who supplied BMC with cattle in 2009 and urged them to continue doing so.

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Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.