De-Listing Push BMC Into Debts

| April 13, 2015

Botswana Meat Commission (BMC) chief executive officer, Dr Akolang Tombale says the previous de-listing of BMC from supplying the European Union (EU) markets with beef had pushed the commission into debts.

Briefing the media about the commission’s current state of affairs and other related matters, Dr Tombale said the EU markets were the best markets for selling beef products, adding that the 18 months de-listing had created setback in their operations.

He said after re-listed in 2012, they suffered financial loses involving product recall. Dr Tombale added that after an EU audit in March 2013, the Francistown plant was suspended from supplying the EU market due to the Foot and Mouth Disease outbreak.

Dr Tombale noted that the challenges compelled the government to inject a lot of finds into the abattoir especially during the delisted period creating a debt of around P594 million. He added that the money was injected as a loan when there was virtually no production.

The chief executive officer also noted that BMC borrowed about P125 million to upgrade the Francistown plant, and that P50 million was borrowed from Bank ABC to resuscitate the Maun plant pushing the loan book to over P700 million.

Due to non-production in 20112012, he said they incurred losses amounting to P233 million in 2011 and over P300 million in 2012.

“As a result of these losses and huge debts, BMC resorted to using short term loans to address its operations,” he said.

Dr Tombale said they were guaranteed P300 million from Standard Chartered Bank which added to the debt and increased the cost of borrowing. He said BMC pays over P45 million in interest and in addition pay P34 million annually to First National Bank (FNB) and about P7 million a year to Bank ABC. He noted that the total cost that has to come from their operations to pay these loans was over P86 million per year.

Source : BOPA

Source : Botswana Daily News

Category: Business & Finance

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