COTTCO Holdings Limited has recorded a reduction in cotton volumes to 30 000 tonnes in the just-ended season, as compared to 43 697 tonnes in 2014 due to failure to provide adequate timely funding for cotton growing inputs.
Speaking at the company annual general meeting in Harare yesterday, Cottco acting managing director Chris Murove said the industry as a whole recorded a decline in the national crop to 90 000 tonnes down from 135 000 tonnes realised from the previous season.
“The slump in cotton production was mainly driven by the failure of the entire industry, cotton included, in providing adequate timely funding for cotton growing inputs, which resulted in lower yields. The poor rainfall pattern across the sub –region also worsened the situation,” Murove said.
He said Cottco was now at the tail end of ginning, with the process having taken this long due to erratic power supplies and other economic factors.
Murove said the buying of cotton was well organised and managed by the Cotton Ginners Association, under the supervision of the Agriculture Marketing Authority and the process eliminated the perennial problems of side marketing.
“Under a new arrangement, Cottco is now preparing for this planting season and to date, farmers have been registered using our own data base in partnership with Agritex. Already our inputs have been procured by the government ahead of the proposed government debt equity swap.
“This project is at an advanced stage and our financial advisors are finalising a circular to our shareholders, with regards to the debt takeover by the government in exchange for shareholding in the company,” Murove said.
Murove said in preparations for the government takeover of Cottco, the board was finalising staff rationalisation, as well as the right sizing of the business with the focus now on deploying personnel with the necessary critical skills in the approved new company look.
“A turnaround strategy has been completed and approved by the board and work has commenced to implement this strategic plan, whose trust is to upscale the production volumes in the coming season, consolidate the cost cutting measures undertaken to date and return the business to profitability,” he said.