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Transportation a major setback for Botash

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Transportation costs remains a major challenge for the business operations of Botswana Ash (Botash), management has said. 

Unlike other commodities whose pricing is dictated by the volatile global market conditions, Botash Operations Manager Kangangwane Phatshwane explained that market conditions are not so much a factor for their product. However, this is not to suggest that they are immune to market conditions.

“We do not experience price escalations unlike with other commodities of copper and nickel as it has been observed lately. The most challenging aspect in Botash is transportation.” Phatshwane said last week in Sowa Town where Botash had hosted the local media.

Transporting their product to the market is very costly. “We spend P300million to the South to transport soda ash and coarse salt per annum and this impact on our profit margins every year,” added Managing Director Montwedi Mphathi.

This amount is shared between Botswana Railways and South Africa’s Transnet, he explained. Road transport, said Mphathi, costs economies a lot of money more than it can be imagined. Botash uses road transport to transport their product to the North.

As part of the company’s strategic themes, Botash will look into the supply chain and logistics capability to optimise its existing supply chain and design a market strategy with logistics channels in mind. 

Part of the company’s project in line with the theme; is to accessible to customers and develop pre-packs for the market. Mphathi said they are currently concluding warehousing and delivery options in this area. Botash is also looking to set Zambia as a hub to make products readily accesible to customer and develop pre-packacks for the market.

In another development, Botash is looking to develop a new customer base in Sub Saharan Africa for soda ash and salt. The targeted markets are Mozambique, Tanzania, Rwanda, Burundi, Angola and DRC and the existing South Africa.

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Gov’t swiftly acts on BMC

Koobonye Ramokopelwa

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Government has moved swiftly to place Botswana Meat Commission under the care of a management firm; the move is meant to put the Commission into shape both operationally and financially.

This was disclosed by Finance and Economic Development Minister, Dr Thapelo Matsheka, further stating the BMC is technically insolvent despite having received nearly P1billion as a bailout in recent times. The new management company will run BMC, which is based in Lobatse starting on the 2020/2021 financial year.

The finance minister made it crystal clear that, the move to appoint a caretaker firm for BMC was made to protect the interests of all stakeholders, including farmers. According to Matsheka, the Minister of Agriculture Development and Food Security, Dr Edwin Dikoloti will provide more details on the BMC changes in due course during his committee of supply speech. Government is also proceeding with the conversion of BMC to a company under the Companies Act following the approval of BMC Transition Bill and subsequent repeal of the old Act.

The repealing of the BMC Act has since eliminated the monopoly of the Commission when it comes to beef and cattle export. The repeal has also enabled government to establish a beef regulator which will be responsible for regulating the beef and the cattle sector. “Another aspect of the transition is the ultimate privatization of BMC.

The objective of the privatization of BMC is, among others, to engage the private sector in the ownership and management of the BMC to achieve operational efficiency and profitability, as well as reduce Government’s future financial commitments in the entity. This would be an important process in the transformation of the beef and cattle sector,” noted Matsheka. BMC which is 100 percent owned by government has been operating with losses for many years due to internal and external challenges such as poor supply and Foot and Mouth Disease(FMD).

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BSE invite companies for CSD project

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Botswana Stock Exchange (BSE) has intentions to implement a new Central Securities Depository (CSD) system by the second quarter of next year.

Authorities at the bourse have already put out a call for companies to perform a post migration data verification and quality assessment from the current depository system to a new depository system set to go live in the first half of 2020.“As part of the project, the BSE is to migrate master data and reference data from the current system to the new CSD system,” said BSE in a statement released this week.

According to BSE, the project will include comprehension of the BSE Data Migration Strategy and Plan and data mapping design and rules, review of the data migration ETL processes, data quality verification completeness, accuracy, consistency, definition and scope of data to migrate. In addition, BSE said it will migrate only active or open transactions in the current system to the new system. The scope of open transactions includes active or running corporate actions, active investor accounts, investor account balances above zero, active participants, active issuers and active instruments.

Meanwhile, BSE Chief Executive Officer, Thapelo Tsheole is on record citing that the new CSD system comes with functionalities such as securities borrowing and lending (SBL), management of the settlement guarantee fund, initial public offering (IPO) processing, e-voting for listed entities, repo management and online investor access.

Commenced in the first quarter of 2019, the project is also an integral element of the ongoing single CSD project pioneered by the Ministry of Finance and Economic Development, Non-Bank Financial Institutions Regulatory Authority and BSE.

The system is also expected to help increase the CSD system ratings by Thomas Murray, an assessment of which will be conducted once the system has been commissioned in early 2020.

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