The abattoir industry in Bulawayo is as dead as has become many companies in the one-time bastion of Zimbabwe’s industry.
BY MTHANDAZO NYONI
Many companies in Zimbabwe’s meat industry have either closed shop or are operating below capacity due to the liquidity crisis, among other economic troubles dogging the nation.
The shortage of cash in the country has seen consumers cutting down drastically on expenditure — including meat and meat products.
So dire is the situation that most abattoirs are faced with closure while others are seriously considering further retrenchment.
Abattoirs Association of Zimbabwe chairperson Godfrey Chanetsa told Standardbusiness last week that all was not well in the sector.
“The state of the abattoir industry is bad. There is no money. Hopefully, the plans underway to introduce bond notes will bring change,” Chanetsa said.
He said the industry was operating at around 50% of capacity and “we are not happy about that”.
“Nothing can change the situation unless the issue of liquidity improves. The liquidity crunch has affected the capacity of abattoir industry,” he said.
Chanetsa said butcheries had reduced their meat uptake due to reduction in consumer expenditure and this was threatening the viability of abattoirs and the generality of the raw leather industry.
Some of the once vibrant players in the industry like the Cold Storage Company (CSC) and Wet Blue Industries are in the intensive care unit.
CSC, which used to be the biggest beef processor on the continent and exported beef to the European Union, is saddled with a $22 million debt and owes workers $2,1 million in outstanding salaries.
The company used to handle up to 150 000 tonnes of beef and associated by-products per year and was the major supplier of beef to the EU, but corruption, mismanagement, sanctions and persistent outbreaks of foot-and-mouth disease brought this to an end. Exports were halted in 2001, affecting the CSC viability.
Wet Blue used to be one of the biggest tanneries in Zimbabwe, processing between 18 and 25 tonnes of leather a month for export, on behalf of CSC which was the country’s biggest abattoir. The company is now under judicial management.
The company’s judicial manager Chrispen Mwete said Wet Blue was not operating due to lack of business.
Mwete said Wet Blue was in discussions with CSC to find ways of reviving the company’s fortunes.
Another industry player who requested anonymity said the sector was yet to recover following a $0,75 levy which was introduced by government in 2014.
In 2014, government introduced a $0,75 tax on every kilogramme of raw hide for export, in a move that was expected to boost value addition in the leather industry as well as curtail the exportation of raw hide by local abattoirs.
Following the introduction of the levy, the industry cried foul, saying the move impacted negatively on their business. Some companies stopped raw hide exports altogether while others slowed down operations.
“Ever since then, we are struggling to make ends meet. We lost thousands and thousands of dollars worth of business as a result of that levy,” an official said.