BMC attributes losses to measles

Pauline Dikuelo | Friday April 10, 2015 14:26

 

BMC chief executive officer, Dr Akolang Tombale told the media yesterday that measles ate between 13 and 15 percent of earnings (or P57 million) from the state meat corporation’s profits annually. He said measles cost BMC a fortune and it will soon launch its own strategy to fight it. “Measles cost us dearly, although we are part of the government’s wide strategy to fight measles, we will soon launch our own strategy as this cost us dearly.”

In 2013, the Francistown BMC plant was suspended from supplying the European (EU) market due to the Foot and Mouth Disease. Tombale also said the 2011-2012 delisting from the EU market contributed to the corporation’s financial losses. “We suffered a major setback as EU is our best market and lack of activity during that time really affected BMC. Therefore due to non-activity in 2011-2012, the losses amounted to P233 million in 2011 and over P300 million in 2012,” said Tombale

He added that due to the challenges, the government was forced to pump a lot of money in BMC that accumulated to P594 million in loans. In addition, BMC borrowed around P125 million to upgrade the Francistown plant and another P50 million form Banc ABC to resuscitate the Maun plant. As a result of these losses and the huge debts, BMC resorted to using short-term loans to finance its operations. The last loan was a P300 million facility from Standard Chartered Bank.

“The operation model of BMC is also difficult to manage, because of the needs for traceability especially for the EU market. Cattle slaughter for this market must come from registered holdings where proper records are kept to ensure traceability,” he explained.

Despite the high cost of running feedlots for slaughter and for traceability, BMC has about 27,000 cattle in feedlots valued of over P200 million. The corporation spends about P100 million to feed the cattle for 90 days. “We have over P300 million tied up cattle stock and it takes another two to three months to slaughter and market the products. Therefore, it is a total of five to six months before we can get proceeds from the products of these cattle,” Tombale said.