The decision by government to continuously award Food Botswana, a subsidiary of Sefalana Holding Company Limited, tenders to supply nutrition supplement food has not gone down well with some local companies. Sefalana Group Managing Director, Chandra Chauhan, confirmed to Sunday Standard on Friday that over the years, his company has been awarded the tender to supply government with Tsabana and Malutu which government in turn issues out in local clinics and health facilities across the country.
Although the value of the tender was not divulged, the company revealed that two of the total number of companies which are interested in supplying the government with the same product queried the government tendering processing which they deem unfair.
“The two companies allege ‘favouritism’ on our side from the government despite the fact that we tender fairly just like them. The fact of the matter is that no company at the moment can be able to handle this render as it requires machinery which we are the only one having it,” Chauhan said without mentioning the concerned companies names.
He said he suspects that the concerned companies want to import the stuff from South Africa if awarded the tender then supply it to government which he feels will not be sustainable business model.
He further confirmed that the queries have led to delay in the awarding of the 2014/15 contract which he said his company awaits its outcome.
“The tender for the 2014/15 contract has been submitted and Food Botswana awaits the outcome. If successfully secured, it is anticipated that production will commence in February 2014. This will mean a gap between contracts of almost four months. During this interim period, focus has been on developing and selling products to individuals and other non-Government agencies.”
Food Botswana has during the past year substantially completed the two Government contracts for the supply of Tsabana and Malutu awarded in the last two years. The subsidiary has contributed 8 percent of Sefalana’s turnover and just over 29 percent of its profit before tax.
Meanwhile the Botswana the Stock Exchange listed company further announced plans to construct a maize plant in Serowe village towards the end of 2014. The set up of the plant is expected to increase Group profitability through efficiencies in the supply chain of maize based products sold by another subsidiary, Sefcash in its Retail and Wholesale outlets.
Chauhan noted that the significant improvement in results compared to the comparative period is partly due to the timing of the contracts but also due to orders for additional volumes in the current period. “The quality of grain procured has also resulted in a better than expected yield.”