Tuesday, September 29, 2020

Cloak and dagger intrigues in failed BMC deal

Sunday Standard investigations have turned up cloak and dagger intrigues in the bid to stop attempts to close the Botswana Meat Commission (BMC), UK-based marketing arm (Allied Meat Importers) and give the business to some agents of the Namibian MEATCO.

Some BMC and government officials secretly tape recorded proceedings of their meeting with Namibian MEATCO agents who wanted to take over the marketing of Botswana beef in the UK.
The move followed recommendations by Australian consultants, GRM, who had been appointed by the Minister of Agriculture, Christian De Graaf, to help restructure BMC.

The consultants felt that Allied Meat Importers was milking the BMC and recommended that it be closed down. At the same time, some agents from Namibia’s MEATCO were courting government for a contract to market Botswana’s beef in the UK.

Initially, Allied Meat Importers based in Waltham Cross (Hertfordshire) marketed and Promoted BMC products under the ECCO Brand, The Swazi Meat Industries products under the SIMUNYE brand and the Namibian MEATCO beef.

MEATCO, however, later pulled out and started marketing its own beef. When the Australian consultants recommended that Allied Meat Importers be closed down, some MEATCO agents approached Botswana for the Allied Meat Importers’ business. They arranged to fly into Botswana on April 2008 for a meeting with government and BMC officials. BMC and government officials who opposed the closure of Allied Meat Importers believe that this was part of a bigger plan to strip the BMC and share it among friends and associates.

The suspicion was fuelled by a proposal presented to government by the Chairman of Botswana Cattle Producers Association (BCPA), Philip Fisher. BCPA said it was interested in taking over BMC and running it as a cooperative owned by local cattle producers.

It turns out that in Namibia, plans were already underway to turn over MEATCO to Namibian cattle producers. According to the plan, the Botswana cattle producers would then merge with Namibia’s cattle producers to form one big meat processing company.

Fisher’s proposal was in part premised on the BMC Act which states that the meat commission exists to service the interests of local farmers. BCPA even approached the Swedish Government for sponsorship to study the Swedish beef processing model.

In June 2008, Fisher and the Minister of Trade and Industry, Neo Moroka, went on a Trade Mission to Sweden where they met the Chairman of Swedish Meats.
Swedish Meats is a meat processing and marketing business owned by a Swedish farmers’ co-operative with 22,500 livestock producer members. The Swedish Meats has joined business with HK Ruokatalo Oyj, a meat processing and marketing business owned by a Finish farmers’ cooperative.

The two cooperatives – HK and Swedish Meats – have combined their
meat processing businesses into one large multinational meat processing and marketing business in which each cooperative holds shares.

Following the trade mission to Sweden, Fisher then wrote to the Minister of Agriculture, Christian de Graaf, and the then Permanent Secretary in the Ministry of Agriculture, Lucas Gakale, proposing that they should consider a similar model for BMC and Namibia’s MEATCO.

Fisher told the Minister and his Permanent Secretary that the Botswana Cattle Producers Association would be interested in exploring the idea of a similar merger of “BMC’s and MEATCO’s meat processing and marketing businesses under one management structure to generate the synergies and scale economies required to gain sustainable competitive advantage in regional and EU markets going forward”.
In Namibia, the plan was already in motion. According to its 2007 Annual Report, MEATCO said it was investigating the possibility of conversion into a producer cooperative.

Fisher was lobbying on the Botswana side that likewise, BMC be converted into a producer cooperative. He said the two cooperatives would then work on a merger which would take time.

Fisher proposed to Gakale and De Graaf that “as an interim measure, it would be useful to explore the advantages of MEATCO and BMC closely collaborating on abattoir forward downstream activities, including product development, branding, packaging, marketing, sales, logistics, and distribution, to maximize returns to producers”.

The then BMC board chairman, Botsile Gubago, was, however, unhappy that BMC had been excluded from the meeting between BCPA, Minister Moroka and the Swedish Meat chairperson.

In a letter to Gakale, copied to a number of interested officials, Gubago stated that: ”These are interesting ideas that, with open minds, could perhaps be explored. But I am intrigued as to why only the BCPA seems to have accompanied the Honourable Minister to such a meeting. I believe BMC has a contribution to make and should play a role in any exploratory discussions and/or meetings of this nature”.

Gubago, who was to become a strong opponent of the proposed deal, left BMC six months ago before the end of his term, sparking speculations that he was frustrated out.

Gakale also shared Gubago’s concerns about the planned BMC deal. A career civil servant, Dr. Gakale has since been retired as well.

Another strong opponent of the failed BMC deal, Motshudi Raborokgwe, has been having difficulties renewing his contract. The board has been giving him a few months extensions. He was given a six months extension in November last year while the board was head-hunting his replacement using the KPMG firm of auditors.

In March 2009, KPMG reduced the candidates to a short list of three, which included Raborokgwe.

But in the final analysis the BMC rejected all three short listed candidates as unqualified. Ironically, the current CEO, Dr. Raborokgwe, who has been running the BMC for the last five years, is one of the candidates who have now been rejected by the BMC Board as unqualified to be CEO.

The BMC officials, who were opposed to the proposal to turn over the BMC to a cattle producers’ corporation, made representations to the Minister of Agriculture Christian De Graaf.

When they felt that De Graaf was not taking any action, they then took up the matter with Vice President Mompati Merafhe. About this time, the corridors of power at the government enclave were abuzz with reports of a plan to strip and gut the BMC.

With the reports flying thick and fast, Fisher was in February this year forced to write to President Ian Khama, Vice President Mompati Merafhe and the Permanent Secretary to the President, Eric Molale, explaining the Botswana Cattle Producers Association proposal to take over BMC and run it as a cattle producers’ cooperative.

Fisher’s plan resonated with one proposed by Nico Czypionka to help improve the Botswana beef industry. Czypionka worked for sometime as a consultant for the preparation of the strategy for Economic Diversification and Sustainable Growth and Action Plan for the Business and Economic Advisory Council (BEAC).

It was during his tenure at BEAC that recommendations were made to diversify the Botswana economy and one of the sectors identified was agriculture, especially cattle farming. Sometime in 2006, Czypionka, together with PEEPA Chief Executive Officer, Joshua Galeforolwe, made a presentation to the BMC board on how the Commission’s efficiency could be improved.

It was about this time that cattle producers developed a liking for Czypionka who had been helpful to cattle producers in motivating significant BMC price increases.

The recommendation to close Allied Meat Importers and the proposal to turn over BMC to Botswana Cattle Producers were, however, rejected by government the moment it became clear that the real beneficiaries would be the large scale barons at the exclusion of ordinary farmers.

RELATED STORIES

Read this week's paper

The Telegraph September 30

Digital edition of The Telegraph, September 30, 2020.