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Water shortages hit BMC operations

Beef Measles incidence likely to increase  

Botswana Meat Commission is feeling the pressure of the water shortage situation. This was revealed by BMC spokesperson Brian Dioka, responding to an enquiry by BusinessPost.

The water shortage crisis was further exacerbated a shutdown of North South Carrier (NSC I) were interrupted from Friday last week, to September, for repairs, when a leak was discovered along the pipeline in the Bonwapitse area. The water which is pumped from the north of the country, feeds the greater Gaborone area, which goes all the way to Goodhope. Water supply recovery will start from the 7th of September 2015 and may take up to two weeks for some areas.

In an emailed response to this publication, Dioka said that: “BMC like any other business is affected by the prevailing shortage of water, given that it is one of the main users, in Lobatse, of piped-water sourced from WUC. BMC uses about 4 cubic metres of water per animal -4000 litres per animal – that adds to about 2 million litres per day, but the rationing has halved total supply of water to the Lobatse abattoir, reducing even the number of animals which can be slaughtered.”

“The Commission, in Lobatse slaughters about 600 to 650 cattle a day, and the entire production line requires clean/safe water through-out. In instances where there is no water/electricity/plant malfunction – the entire operations are shut-down to avoid exposing our product or even being downgraded by the competent authority, and this potentially equals opportunity losses of over a P 1 million daily on production (given that it disrupts the slaughter schedule, causing delays and increased expenditure of cattle feed – for those awaiting slaughter).”

“The other direct effect of water shortage is that it will potentially increase the prevalence of beef-measles (which currently seat at an alarming 13-15 percent nationally). With water being scarce, the veldt could easily get exposed to human-waste, our fear is to realise an even worse measles prevalence rate at the end of it all. National measles rate is 10 percent (which is still high compared to all neighbouring countries whose rates are less than 5 percent) the irony is that we are a chief-supplier to lucrative markets, which could one day be irked by the Botswana measles rate and even stop importing Botswana beef.” In 2013, BMC losses of up to P73 million caused by measles infested cattle.

“BMC for 2015 intends to slaughter over 188 000 cattle to reach desired sales. As at end of August 2015, we had achieved slightly above 100 000 cattle, and are now forced to re-double our efforts in the remaining 4 months to achieve the intended figure – since we slaughter about 13000 in a month-provided there is sustained supply of clean, safe water and other critical utilities. This will obviously mean that workers will have to be engaged on overtime, and this has a cost bearing on BMC Lobatse plant which employs about 950 employees who work on a 5 day roster,” he stated.

However, Dioka said that the water situation does not put BMC in danger of losing its licenses to supply the high end European beef buyer market.

“The prevailing calamity (negated by reduced supply of water) however, does not pose any threats on supply/market licenses such as the EU or any other; the challenge it poses rather, is whether BMC would be able to supply the required orders to its customers on time; But we have since been proactive by signalling to our customers that their orders might be supplied late.”

Dioka said that the Commission has taken a decision to reduce dependence on WUC supply by constructing a water treatment plant to clean water siphoned off boreholes that the Commission owns.

“BMC leadership has swiftly moved to tap on its own resources, as a matter of priority. BMC Lobatse Plant currently has two boreholes with a combined yield of 50 cubic kilolitres per an hour of untreated ground-water. The commission has since approved the construction of a quality treatment plant, which will make the referred potable for usage. This will ease-off dependence of WUC, and also cut our water expenditure by over half a million pula on monthly charges/costs.

Envisaged construction of the treatment plant will cost BMC P3 million and take just about 8 weeks to complete, given that some parts have to be customized for the project.”

Dioka said that BMC however notes great relations with WUC (Water Utilities Corporation) which has been in existence over past decades, noting that “even at this stressing period of water shortage, the two stakeholders continuously apprise each other on the prevailing circumstances and mulling-over corrective plans and measures as a way forward.”

“BMC also applauds government for its continued efforts to restore normal water supply, and this should be a call to everybody for better usage of this resource.”

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CA SALES revenues rose to R9.5 billion

27th March 2023

The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods

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Grit divests from Letlole La Rona

22nd March 2023

Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.

The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.

Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.

This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.

In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.

Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.

The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.

“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said

In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.

The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.

Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.

Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.

Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.

Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.

“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.

LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.

The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.

An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.

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Stargems Group establishes Training Center in BW

20th March 2023

Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.

The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.

“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.

In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices.  Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.

“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.

Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy,  Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.

“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.

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