CSC Revival excites global market

Source: CSC Revival excites global market | The Sunday News April 21, 2019

CSC Revival excites global market
Cold Storage Company

Dumisani Nsingo, Senior Business Reporter 

THE impending revival of the Cold Storage Company (CSC) has already caught the eye of major foreign markets with countries such as China, United Kingdom, Germany, Switzerland and a host of African nations among those that have made enquiries about buying beef products from the country’s major beef processor.

The development follows the coming in of a new investor. In a wide ranging interview with Sunday News Business last Tuesday in Bulawayo, the new investor, Boustead Beef Zimbabwe managing director Mr Nick Havercroft said a number of foreign customers both old and new had expressed interests to source beef and various meat products from CSC once it resumes production.

Boustead Beef Zimbabwe is CSC’s newly found investor, which is expected to turn around the fortunes of the country’s meat processor and marketer, which was teetering on the verge of collapse for almost two decades. 

“As for beef, I have secured all the markets for more than I can supply. We have markets stretching to China. They (Chinese) will come and inspect the factory once it’s up and running. We have already secured that one (Chinese market). They have a big off take there. I was also invited to Angola and they want de-boned beef, which is good for us because it is value addition. They will take as much as we can supply.

“We have enquiries from England. It’s very good for us because they are looking for new market sources for beef. There is also Egypt and Libya but now there is a civil war there. We also have Algeria and Dubai where we have a very good demand from the UAE but for the high end product sirloin and fillet which is perfect because sirloin, fillet and rump steak have low demand in here probably because of the price . . . ,” he said.

Mr Havercroft said the high demand in ground beef in Europe and America would also push the company to explore those markets. 

“About 60 percent of all sales in Europe and America is all ground beef because people want to eat burgers, bolognaise and meat balls . . . we have done tremendous research on this market and we can sell everything, there is no problem. I will not lose sleep over who to sell beef to but rather if I can produce enough beef to supply because the demand is there,” he said.

Mr Havercroft also said efforts were being made to resuscitate CSC’s canning factory, which has been mothballed for close to two decades with its products earmarked for the export market.

“There is demand for all the products and we are bringing in new product lines there (canning factory). That’s a gold mine because there is a demand for all the products we can get out of there. Former customers have already been in touch with us from England, Germany and Switzerland wanting the products and knowing when they will be available. 

“Corned beef is a big one and jellied beef tongue. They even asked us if they can send tongue from Brazil so we can put it in the cans . . . There is a huge demand for oxtail in Germany, for the beef extract. So we will only be producing our own brands rather than selling in bulk. We want to do the value addition so we start bringing out our own bottled oxtail,” he said.

Mr Havercroft said the company was receiving a lot of support from the British Trade Council.

“We have a lot of support from the British Trade Council and they are very interested (in our progress). We keep them regularly updated because our main investment is coming from London so it’s good PR (Public Relations) for us and its good PR for the country,” he said.

Products for the overseas markets would be marketed under the Boustead Beef while those for the local and regional markets would be marketed under CSC’s brands.

“We are looking at making only a seven percent profit within Zimbabwe. Our profit is on our exports, which means we can subsidise the price of beef locally and the minute we do that we will get more customers coming our way and that’s backed out by our exports. I can export 100 percent of our beef because I have the orders but I want to put at least 20 percent on the local market,” said Mr Havercroft.

The company has also received offers to slaughter sheep, goats and cattle from Namibia with Botswana also indicating intention of having part of its cattle slaughtered in the country as well. Mr Havercroft said the resuscitation of CSC had started with work at the headquarters in Bulawayo in motion and expected to be completed within six months, thereafter Masvingo, Chinhoyi and Marondera branches would be revitalised. A team of engineers from the United States, England and China contracted by the investor was in Bulawayo to assess the main abattoir last month. 

About US$16 million would be injected towards refurbishment work in Bulawayo with most of it going towards resuscitating the cold rooms, which have been non-functioning for about 15 years.

“Our biggest challenge is not the infrastructure. It’s the compressors in the cold rooms. There should be eight compressors here and all of them are broken down and they (manufacturers) don’t make that model anymore. So we have to have compressors specially designed and made, so that the moulding will fit into the system here, that’s our biggest challenge. People (experts) in Europe have quoted us two years to have it (Bulawayo factory) up and running but we are confident that we can do it in record time of about six months,” said Mr Havercroft.

He said the company would offer farmers favourable prices for their cattle with them having an opportunity to observe the various stages their animals go through right up until being sold to the customer.

“We are working very closely with the farmers where they become part of the business. A farmer can follow everything on his mobile phone so one who produces top quality will get a much better back payment . . . the farmer can follow the cow all the way to the customer,” said Mr Havercroft.

About US$3 million to US$5 million would be invested towards installing a state-of-the-art Information Technology system for monitoring operations at the company’s branches as well as cattle at the farms or CSC’s ranches right up until being sold.

The company is also working on putting in place fodder banks and feedlots across the country as part of its efforts to enhance the quality of the cattle.

“We are going to be putting irrigated pastures and feedlots and farmers can bring in their animals to the feedlot and we weigh and after 90 days it may be weighing another 100kgs more so we will deduct the cost of the feed and the farmer will get a better payment instead of offloading the animal at 60 to 70 cents per kg because of the drought,” said Mr Havercroft.

He said a goat finance scheme was also being put in place as a way of ensuring improved production of the small stock. Mr Havercroft said Zimbabwe offers an ideal investment environment for any investor.

“We are here for 25 years onwards. So we are spending money now, which we know we will recover in 10 years and if we recover that investment we will start making money. We know that in a business you cannot make money within three years . . . luckily we have a long-term deal and also we have a lot confidence in Zimbabwe. I have been here for a long time and most of my investors have been investing in Africa for a long time. So we understand some of the challenges we will face. It’s high risk but we know there is high demand for beef in the world and it is growing. We have a secure market for everything we will produce, so that’s why we took up this investment. People say it’s a risk, Zimbabwe is not as risky as what most people perceive, it’s about perception,” he said.