BMC out of the woods

Tuesday, 17 February 2015 16:04   |   Written by
BMC out of the woods

Almost two years ago, Dr Akolang Tombale, BMC’s most senior executive was tasked by cabinet to steer the BMC sinking ship and keep it afloat. Today, the former government technocrat is convinced that his organisation is in still waters.

He journey with the organisation started on acting capacity until he was confirmed last year. Before his appointment at the national beef commission, all performance indicators were in the red. At the time, the possible collapse of BMC was mainly due to poor corporate governance to a ban on export of beef to Europe, it’s main market to date. After putting some turnaround strategies, the balding Tombale is excited the commission is now reaping result of hard work, as the balance sheet has turned green. “Last year, we made history by making P1 billion in revenue,” said the soft-spoken Tombale. He is confident that they will be able to achieve better results this year.

“We won’t be worse than last year,” said the upbeat Tombale, who also doubles as BCL mine chairperson.
Tombale is not hesitant to state that to turn the corner at BMC, it was all about teamwork. ”Despite the suspension on beef exports, the commission had a number of inefficiencies ‘which needed to be corrected,’ sooner than later. Cutting unnecessary cost was key on his first few months on the job. “We also had to restructure our market division,” he says. The appointment of Global Protein Solutions (GPS) to do the company’s global sales also boosted sales in Europe and South Africa. Europe remains the country’s biggest market by any measure. Over 40 percent of BMC revenue comes from this market. Botswana and South Africa also receive a sizeable portion of the commission’s produce.

EU has tight rules on exports from its supplies including Botswana. A ban on beef exports from Botswana to Europe in 2011, due to foot and mouth disease nearly brought BMC to its knees. A number of industry players took the opportunity to lambast BMC for its heavy dependency on Europe market. “We are better off with Europe. They offer better prices for our beef,” says Tombale. Market diversification is key, but that should also be balanced with profitability.
That’s said, BMC is not taking anything for granted. It has launched a spirited crusade for market diversification.

Countries such as oil-rich Angola, Mozambique, and Hong Kong are just of the many markets they are targeting. No deals have been signed as yet, Tombale confirms. However, the Kuwait market appears to be in sight. A delegation from the Gulf States is expected to be in Botswana anytime soon to assess the possibility of importing beef from Botswana. All things being equal, BMC is hoping to clinch a deal from the country. The commission is also looking for markets that can accept beef from FMD affected areas, mostly in the Ngamiland region.

“One of our problems is that most of our cattle are raised in communal areas,” he says. BMC has in the past accused of poor services by farmers, especially those in far-flung areas. In a push to get closer to clients in Botswana, the company has opened regional offices. This includes one in Molepolole and Gantsi. The role of the satellite offices is to ensure farmers ‘do not travel long distance’ in order to access BMC services. Additionally, BMC is also in a better position to make projection on supply, based on farmers promise to sell cattle. It is at these offices that BMC also train farmers on best methods on beef cattle raising.

Over the years, farmers across the board have bitterly complained about the commission’s less competitive prices. Tombale is quick to admit this. “Yes there are those who feel our prices are low when compared to the region. We are improving them,” he says. Just a year ago, BMC was paying P8 per kg for a weaner, but they now pay P12.00 per kg which shows the commission is heeding to farmers complaints. “South African prices are better,” says Tombale. As things stands, BMC is the monopoly as far as far as beef exports is concerned.

Over the years, big farmers, especially in the Gantsi region have called for the commission to be stripped of the monopoly. The process requires the amendment of the BMC Act through parliament. The Act has been tabled before parliament for possible amendment, but legislators have not voted in favour of change in the status quo.

“We are better united than fragmented,” he says. Botswana is unable to meet Europe beef demand, and Tombale wondered how the ending of BMC monopoly would improve exports. Tombale is excited that Botswana has in principle agreed to the Economic Partnership Agreement (EPA) with Europe. “This means our Europe market is even more secure. Europe is still a better market for us,” he adds. The EPA allows for more trade in almost any commodity between some Southern Africa Development Community (SADC) and Europe.