Limping NAPRO cut staff after multi-million pula loss

Onalenna Kelebeile | Friday August 17, 2018 13:28

Kebakile told Mmegi that much of the losses incurred were towards the wage bill while the sales were not growing.

He further explained that the privatisation exercise of the plant is in the pipeline, hence the retrenchment was necessary as increased losses would be a deterrent to any potential investor.

“There was need to contain costs, minimise losses and make it attractive to investors.

A committee currently set up, is making consultations to ensure that the privatisation exercise is done properly and NAFTRC is coming up with initiatives to ensure that NAPRO is sustained and its products retained in the market.  “We do not want a pseudo investor who would buy and close because we want it to benefit Batswana,” he said.

He added that by retrenching nine out of 34 employees they have cut a third of the wage bill from P300,000 to P100 000 monthly.

Those retrenched were in the management and professional fields. It has been explained that the staff costs exceeded sale of products making NAPRO operations highly unsustainable, he said.  According the acting MD, during the 2016/2017 financial year, NFTRC allocated P5.4 million of which the large cost went to monthly salaries and the funds were depleted by the end of March this year before NAPRO could sustain its operations.

NAPRO retrenches at a time when it is at phase 1 of its establishment and it was projected that it would take five years to break even.

Kebakile said that they had anticipated that they would recover the operational costs sooner, but it emerged that it would take much longer.   The Board has reverted back NAPRO to research and development status of NFTRC where professional leadership will be provided by NFTRC staff.

Dr Kebakile further said that the retrenchment was triggered by a serious challenge of failure to sell the products as it was anticipated and said the plant was conceived after a thorough market research and noted that a feasibility study by the European Union came up with a market proposal looking at horticultural production in the country.

“We realised that over 10% of what farmers put in the market goes to waste and we wanted to curtail the losses by converting them to products based on the statistics and studies that were done supported this,” he said.

He added that it is not easy for a new product to effectively penetrate the market, particularly locally made products because of the mindset that they were of inferior quality.

“We need to change this mindset and start patronising the local products. Government can do everything in terms of policies, but the bug stops with the consumer,” he said.

He confirmed that there has not been much support from government in terms of procuring from the plant and that insufficient resources are availed to market NAPRO products.  “Our sales are very low. Government has made a decision to use its buying power to assist entrants in the market under the Economic Diversification Drive, but there seem to be factors constraining procurement officers to cater for new entrants in the market in their tender processes.  “We need to address those challenges because if our sales can improve, then more avenues would open such as farmers producing more. We are currently struggling to sell while operational costs are high, hence we have plunged deep into losses.  “We cannot continue with the status quo hence retrenchment,” he said.

He explained that there was no money to run the plant, hence the retrenchment exercise was a common business decision to relief NAPRO and said if sales could pick, they would be able to recruit again.

He further indicated that they have started talking to government procurement officers, but their system was not very clear and they have taken the matter up with the Rural Development Council and a decision was made that administration officers be engaged so that a decision can be made.

Dr Kebakile said going forward, their key operations would be marketing and producing products in batches and he was upbeat that they will be able to produce adequately with the remaining staff augmented by those from NFTRC.  He said they would fight for the market to open for NAPRO products.

He added that since they made their first entrance in September 2016, their first listing was retail outlets. 

“We have developed action plans focusing particularly on marketing our products.

Selebi-Phikwe must become an agricultural town and must succeed as a food production hub, hence the need for all stakeholders to compliment each other,” he said.

He said NAPRO should be having contracts with farmers by now, but it was impossible because of bottlenecks in the market hence the need to put systems in place to address the bottlenecks so that growth could be realised.

He noted that local farmers could reap value from the P700 million markets for horticultural products. “For a country importing 80% of its food, there is need to build systems that would enable it to compete with other countries on food production.

“But the main challenge is high input costs for farmers. Focus must be on the value chain, addressing of  bottlenecks and equipping farmers with proper skills to bring down input costs,” he said.

NAPRO was setup two years ago and is operated by NAFTEC investments, which is a subsidiary of NFTRC. It was financially backed with P10.9 million by the Office of the President through the poverty eradication fund to start up but its operational costs are funded by NFTRC.