NAPRO plant products hit the market
The National Agro-Processing plant (NAPRO) introduced its products to the consumer market for the first time last week on September 28th. The coming to life of the plant further gives hope to the resurgence of Selibe Phikwe, a town who star dimmed with the collapse of copper-nickel prices.
Daily Needs and Saverite supermarkets, local retail powerhouses in the Selibe Phikwe area were the first to stock the highly anticipated locally produced tomato source and according to NAPRO, the products were already off the shelves before Independence Day celebrations. The feed from customers was very positive.
However the processing entity which has been in operation for about half a year is still operating below capacity. In an interview this week, NAPRO senior management revealed that there is a lot of potential and that the progress of the plant will be monitored closely.
The Operations Manager, Mr Ramogoma Kaisara, revealed that setting up a fully equipped processing facility with required standards was an expensive and labour intensive undertaking.
According to Kaisara, most of their startup capital was consumed by transforming and upgrading the warehouse to the required standards of a processing facility.
“We had a challenge of starting from completely nothing, thus a huge part of our allocated funds were channeled to pre-production adjustments. We had to convert an empty warehouse into a suitable working space, partitioning offices, and fitting the plant with world class processing equipment,” said Kaisara.
Kaisara further observed that they also had to provide on-the-job training for their most of their staff members and capacitate them further with processing skills thus affecting production schedule.
The National Agro Processing plant is an investment by the Botswana Government through the National Food Technology Research Center (NAFTRC) Investment Company.
Its mandate is to increase the shelf life of locally produced horticultural products by processing them into finished products, such as sources, pickled canned meat and different packaging models. The Plant started operations on May 27th this year and has been experiencing production challenges from inception until the end of September
“We officially started processing end of May this year, from that time we had to observe our equipment, make further raw material tests , and adjust to processing requisites that we only discovered after production commencement,” said Kaisara.
The NAPRO team also revealed to this publication that the plant is currently operating below full capacity due to the stated production challenges. “At full peak, the plant should receive raw material of about 32.021 tones of tomato, but to date we are only able to process just about 60 % of that.”
The Operations Manager further emphasized that the plant has not yet experienced any shortage in provision of raw materials from local farmers. He observed that this contradicts reports that local farmers are incapable of feeding the processing plant with vegetables for it to realise full capacity production.
Kaisara said he was confident even at full capacity the plant will not run short of raw materials. “We have sufficient provision of raw materials, our local farmers here in Selibe Phikwe are supplying enough or even more than enough for our plant’s capacity.”
“In addition to that, we are certain that after the electrifying of Motloutse farms and commencement of farming at Thune irrigation schemes, we will have abundant supply of raw materials, which might even require us to expand our plant,”explained Kaisara.
NAPRO NEEDS CAPITAL INJECTION
For her part, NAPRO Finance & Administration Manager, Ms Kebareng Makome indicated that the financial figures of the plant as a company are not looking good. According to Makome, the funds allocated to the plant are depleting hence the need for more financial injection to help the plant realize full production to ensure it makes profits.
Makome was complementing statements made by Ms Metlha Mangwane, the Sales & Marketing Manager, to the effect that NAPRO has rigorous strategies drawn up to penetrate the market, but currently could not implement those due to budgetary constraints.
Mangwane explained that her team is in talks with retail giants such as Choppies, Pick n Pay and others at group headquarters level to woo them ‘into absorbing their products.
DailyNeeds and Saverite are resident retailers in Selibe Phikwe hence it was easy to reach out to them. The Bobonong Cooperative Society retail outlet also started selling the products this week.
STRATEGIC LOCATION AT SPEDU REGION
The processing project, which is strategically positioned in the SPEDU region, was financed by Office of the President. Vice President Mokgweetsi Masisi visits the plant from time to time alongside the troubled BCL mine.
The Vice President was quoted earlier this year at Serowe Agricultural Show expressing high expectations for the investment. NAPRO processes onions to canned pickled, fully nurtured tomatoes to tomato source; and different vegetables to canned pickled achar amongst other products.
According to the Public Relations Officer, Mr Keontse Mothibedi, the company is optimistic that after achieving full peak production capacity, the plant will venture into different agreements like packaging and branding for retail outlets which will assist them penetrate the market and build consumer confidence.
The company expects to start receiving quantifiable sales proceeds by December 2016 and from that time, the finance department will be in position to compile a proposal after considering financial projections.
According to the NAPRO team, they need more cash to help the plant attain profitability and autonomously run itself as a profit making entity.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.