Horticultural Market headed for collapse
Pauline Dikuelo | Thursday September 14, 2017 18:00
The government has been paying rent for BHM’s warehouse in Broadhurst since its inception in 2008 through a grant.
In an interview with Mmegi Business, BHM chief executive officer (CEO) Simon Meti said their situation is getting worse as their last hope, government, would no longer pay for their rental effective next month.
“The situation is now getting worse by the day,” he said. “The withdrawal by government would mean we either move out or close.”
According to Meti, BHM was advised on August 29 this year about the developments, noting that the assistant minister Kgotla Autlwetse told them that the Ministry has no money hence the reason why they chose to cut the assistance they have been extending to them.
Initially, government was supposed to inject P10.5 million while Botswana Development Corporation’s (BDC) contribution was to be P9.5 million, while the remaining P30 million was to come from financiers through loans.
“Government has delivered the P10.5 million they were supposed to inject, which has been used to upgrade the infrastructure and had paid rentals in our warehouse,” he said.
Following several attempts by the BHM board to close it, government has been financially rescuing the market as in July last year they pumped about P2 million into BHM, a move which diluted BDC’s shares from 49% to 26%.
However according to Meti, these efforts were not enough to save BHM as they needed a collateral to secure a loan.
BHM’s P50 million turnaround plan collapsed as it failed to gain support of key stakeholders, with the BDC pulling out from funding the plan.
BDC expressed doubt over the viability of the suggested business model by a South African consultant company, Brand New Harvest. The strategy suggested that BHM should start using the wholesale system as opposed to the commission one noting that it will be viable for the local market.
According to Meti, through the wholesale system, farmers would be allowed to sell all their produce to the horticultural market and get paid compared to the commission arrangement where the BHM sells the produce on behalf of the farmers for a fee.
Currently, BHM is using both the commission and wholesale models, which Meti said varies according to the flexibility of the farmers. They are also importing most of their vegetables and fruits from South Africa which includes butternuts, tomatoes, pears, apples, bananas, avocados, broccoli, cucumber, green pepper, oranges just to mention a few.
“The only vegetables that are produced in the country include potatoes, onion, a small portion of tomatoes and cabbage because locally we are mostly affected by the weather,” he said.