Sunday, April 21, 2024

Operational restructuring vital to reduction of plant inefficiencies – BMC

Botswana Meat Commission (BMC) Chief Executive Officer Akolang Tombale says since they launched their new strategy, the parastatal has managed to reduce plant inefficiencies. He said this at the just ended Ntlo ya Dikgosi meetings.

Tombale revealed that the parastatal is doing everything in its capacity to ensure that it becomes a significant contributor to government’s Economic Diversification Drive (EDD) initiative. “While there is so much room for improvement, we are a significant contributor to the country’s Gross Domestic Product. Since 2012 the sector has been contributing approximately 3 per cent and has provided economic livelihood to a large proportion of small scale farmers who own approximately 80 per cent of the country’s cattle,” said Tombale. He added that the beef industry accounts for approximately 30 per cent of the country’s total direct and indirect employment.

According to Tombale, in order for the BMC to function properly there is need to drastically reduce operational costs and plant inefficiencies. “We need to have a more compliant cattle supply and utilisation of BMC abattoirs needs to rise to at least 85 per cent among other things,” he said.

He also told the house that the parastatal has come up with a strategy to get them to reduce the amount of debt that they are currently burdened with. “The strategy will ultimately ensure that we optimise our working capital, we sell our non-core assets, rationalise plant capacity at Francistown, better manage and control feed lots, outsource non-core activities and improve employee productivity and process inefficiencies,” he said. Tombale said BMC requires P300 million for operations annually and this excludes cattle expenditure.

When updating the house on what their strategy has delivered so far, Tombale said they have realised an annual revenue improvement of 57 per cent. “BMC has achieved more than P1 billion annually in revenue since 2013 to date, of which more than 80 per cent is dedicated to paying farmers, that constitutes over P738 million to cattle suppliers,” he said. Tombale said they have also seen an improved sales strategy as they are now producing improved stock to lucrative and better paying markets such as the European Union (EU) through customer orders.

He further stated that the strategy has resulted in the parastatal achieving better grading standards. “We were A graded for Lobatse and AA graded for Francistown plant in 2016 and this has guaranteed seaming-less entry into global markets. BMC processes by far the best beef in Africa and a part of 3 per cent of the best in the world,” he said. The CEO also reiterated that the strategy has allowed for a successful operational restructuring that has led to reduction of plant inefficiencies and reduction of the wage bill. “By retrenching, redeploying and declaring other services redundant, that is closure of satellite offices in some areas, we greatly reduced some of our burdens,” he said.

Tombale said the biggest stumbling block to livestock procurement has been the negative impact of measles during the first quarter of 2016 in Francistown. “Measles has varied from 13.1 per cent of the cattle in 2013, 10.6 percent in 2014 and 19.7 per cent in 2014 and it has been higher in the prime and super grades,” revealed Tombale.


Read this week's paper