BMC sees light at end of the tunnel
Isaac Pinielo | Friday September 4, 2015 14:30
With the parastatal having been at, or near the bottom, in the past three years, there are already signs that the turnaround strategy is starting to deliver results.
By the end of 2014, BMC recorded revenue of P1.16 billion from 144,000 cattle that were slaughtered.
This was an increase from P1.08 billion registered in 2013 from the 139,000 cattle slaughtered. According to BMC public relations and communications manager, Brian Dioka while the strategy is at mid-point, the commission is already realising results. “One of the positives about this strategy is that we are currently reforming the value chain of the BMC and we have the right leadership and support from the government,” he said.
Recently the BMC got P300 million bailout from government, which Dioka said was a short-term relief for the commission. “When we engaged consultants we proposed to government that we need P600 million to clear debt of all banks and to fully implement turnaround strategy. We can do this with support from government,” he said.
He said they are still in negotiations with government, noting that the bailout is not for the benefit of BMC alone but the entire beef value chain.
Dioka said when the BMC got bailout in the past, it was not efficient since there was too much debt and the bailout came at a time when the commission was not performing well.
“We decided that the BMC should rather be capitalised at a time when it is profitable,” he said.
Dioka further indicated that the current leadership of the BMC started with the corporation post 2012, before the implementation of the strategy, noting that they have already achieved a lot during their tenure.
He also said the other factor that gives them hope about the success of the strategy is that they concentrated on improving the quality of the beef to make it more marketable.
Dioka noted that they want to process efficiency across the value chain, adding that from 2013 to 2015, BMC was scored A-grade by the British Retail Consortium (BRC), a globally recognised UK trade organisation, which established a series of standards to help companies comply with food safety legislation.
“It makes us to fall among the 3 to 4 percent in the whole world in food industries. A company like McDonald’s and other food chains trust the BMC to a point where BMC has sustained supply to these highly priced food companies,” he said.
In 2013, BMC supplied the EU market 6000 tonnes of beef and 8000 tonnes in 2014. With the strategy, the commission hopes to supply more.
Dioka said the EU still remains a lucrative market for Botswana and it does not only improve the bottom line, but also builds relationship with the West and other customers. He said with the strategy, more market will come up. “We are making it easier for government to negotiate for new markets. One of the objectives of the strategy was to reduce operating costs. Within 2014 operating costs were reduced by P40 million. We have increased efficiency and gaps within the BMC value chain,” he said. Last year, the commission obtained a P300 million loan from Standard Chartered Bank in an effort to speed up payments to farmers seeking cash on delivery for cattle purchased.