The Cold Storage Company (CSC) has secured a US$400 million lifeline in yet another milestone in the Second Republic’s bid to revive companies that had become dormant in the last two decades.
The new investor, Boustead Beef Zimbabwe, has also invested in state-of-the-art equipment as part of efforts to bring the meat processor and marketer back to its feet.
Last year, President Emmerson Mnangagwa toured CSC Masvingo where he underscored his administration’s determination to revive the company.
Boustead Beef Zimbabwe managing director Mr Nick Havercroft said his company had entered into an agreement with the Government to invest into CSC.
He said machinery worth at least US$16 million had also been procured and awaited delivery to CSC’s headquarters in Bulawayo.
The company is also repairing infrastructure at CSC’s ranches.
Mr Havercroft said the US$400 million would be spread over the next five years.
“Over the first five years, we were (initially) focused on US$130 million, but we have secured more markets and we are (now) focusing way over US$400 million over the next five years, a lot of that is obviously for securing the beef,” he said.
“We have good finance, very good off-takes for the beef export orders. Our focus is going to be higher than what we had actually planned, so our investment is going to be bigger than what we had anticipated.”
Boasted Beef Zimbabwe is being financed by various equity investors from the United Kingdom, United States, Switzerland, Hong Kong and Australia.
Mr Havercroft said the company would also install US$3 million state-of-the-art worth of technological equipment.
CSC’s Bulawayo complex is the largest meat-slaughtering facility in Africa and only trails Botswana Meat Commission in terms of the latest technologies.
The company plans to purchase a new fleet of trucks for the business.
CSC, Mr Havercroft said, will run all branches and abattoirs in Chinhoyi, Marondera and Masvingo including iother divisions such as the beef canning factory, leather processing plant and Wet Blue Industries.
The company will takeover CSC’s legacy debt.
“The deal was we will take over the debt, which we have done and we are now in the process of beginning to contact those creditors and we have offered them a repayment schedule for between now and the next four years,” he said.
The meat processor’s debt is believed to be close to $100 million.
Mr Havercroft predicted that CSC would swing into profits within the next 18 months.
Speaking after a tour of the CSC’s complex in Bulawayo last week, CSC director of marketing Mr Isaiah Machingura confirmed that the investor had already procured part of the machinery for refurbishing the factory.
He said the investor has started paying full salaries to employees since February.
“Wages are being paid as of February onwards and there won’t be any stopover. More people are going to be employed for all the CSC branches,” said Mr Machingura.
“In terms of operations, we will be talking of slaughtering about 500 to 600 animals a day. It really needs a command of labour.
“We are talking of a lot of by-products that are going to be produce here; for instance, we have tallow, which will benefit local soap manufacturers instead of them importing,” he said.