BMC improves performance despite losses
While the Botswana Meat Commission (BMC) is technically insolvent, the performance of the Commission has improved, this according to the Assistant Minister of Agriculture, Molebatsi Molebatsi.
Molebatsi revealed this week that as per the audited financial statements for the year ended December 2022, the Commission had recorded an accumulated loss of more than P1.5 million. He said the audited results for the year ended December 2023 are yet to be released, but are expected to show a favourable trend.
The Assistant Minister explained that while the BMC has not yet returned to profitability, there has been improved performance in terms of revenue, gross profit and throughput between the 2022 and 2023 financial years. This, he said is premised on the four year turnaround strategic plan, MERITING 2022/25.
“The strategy focuses on: Stemming the financial losses; lessening operational inefficiencies through the improved logistics of acquiring raw material or throughput - as well as addressing plant and process maintenance more cost-effectively. The overall turnaround efforts entail optimising product sales; as well as seeking to extract better value from all the Commission's assets,” said Molebatsi, who is also MP for Mmadinare.
Molebatsi told Parliament that despite this turnaround plan encountering many trade hurdles such as the outbreak of the Foot and Mouth Disease (FMD) in July 2022 at Zone 6B, and an incident of product recall from Norway (in January 2023), plus intermittent global supply chain constraints associated with shipping, the strategy is delivering. He indicated that the BMC continues to record positive revenues and improved throughput levels, and is gaining access to fast growing lucrative markets such as the United Arab Emirates (UAE).
“The BMC does not have outstanding balances owed to its creditors for the period 2019 to 2022. However, I can confirm that since then, there is a total outstanding balance of P98,950,000 owed to creditors through to the current month, (March 2024). Out of this, 67,750,000, or 68 percent is owed to farmers, while P31,200,000, or 32 percent is owed to a variety of suppliers - including utilities, packaging materials,” Molebatsi said.
The Assistant Minister explained that the performance of the BMC has improved since implementation of the 2022/25 turnaround strategy; effective January 2022. The improvement, he said, is expected to continue in the current financial year (2024) and beyond. The improvement will further be boosted by the recent penetration of the UAE market, he said, adding that the recent contract signed with Ethiopian Airlines to move products to external markets more quickly will be beneficial. Molebatsi further said this is a risk-minimisation intervention aimed at improving product distribution/delivery turnaround-times.
He anticipates that payments from customers will be quicker. "This will go a long way in facilitating the Realisation of the standard set for farmers' payments. Additionally, the Commission is engaged in varied projects to resuscitate its non-performing assets such as the Cannery, Tannery, Real Estate, as well as subsidiary companies," he said.
To this end, he said a budget provision of P390 million, comprising P160m for the Revitalisation of the Tannery, and P230m for the Development of the Value Addition and Secondary Processing Plant projects is planned for all Capital Expenditure requirements in the current and next financial year (2024/25).
Molebatsi was responding to a question by MP for Nkange, Dr Never Tshabang who wanted the minister to update Parliament on the financial status of BMC and to further state, the amount owed for each year since 2019 and the cumulative amount owed to date; If the current financial year has a promising turn around and to further elucidate if he is in a position to resuscitate the Commission; and If Batswana have been getting value for their livestock from BMC.