ZIMBABWE – Montana Meats has acquired a controlling stake in Masvingo-based Carswell Meats in a deal now before the Competition and Tariff Commission, The Herald Business can reveal.
In a proposal filed last Wednesday at the CTC, Montana Meats will acquire 65 percent of Carswell Meats.
“I can confirm that Montana Meats and Carswell Meats filed a proposal before the Competition and Tariff Commission seeking authority for the merger, filed on Wednesday August 13, (as is required per the legislation),” Montana Meats managing director Mr Rob Duncan said.
Mr Duncan said both companies have not been trading profitably due to lower consumer purchasing power, rising operational costs and increased competition from both the informal sector and new players in the market.
He also cited low capacity utilisation as the other reason for the low performance.
“The merger would seek to make more efficient use of facilities, lower the operational costs, and improve profitability to acceptable levels,” said Mr Dun- can.
Formed in 1997, Montana Meats initially operated as a subsidiary of a live cattle auctioning company, Zimstock Sales.
About a quarter of the cattle auctioned in Zimbabwe at that time were sold through Zimstock Sales.
By 2003, Zimstock Sales stopped auctioning operations and the company shifted its focus towards meat processing, the purchase of cattle for slaughter and onward sale to butcheries and wholesale outlets.
Mr Duncan said Montana Meats has complied fully with the country’s indigenous requirements. The acquisition of the controlling stake by Montana in Carswell will result in the latter complying with the country’s indigenisation laws.
Meat trading in Masvingo was dominated by a group of abattoirs essentially Carswell, Montana and the Cold Storage Company supplying mostly to Harare. With the CSC almost defunct Carswell and Montana have continued having a healthy trade in the province.
Around 90 percent of their meat ends up in Harare, although Montana has a number of shops and butcheries elsewhere.
Both have networks of buyers who work across the rural areas, sourcing animals which are then transported to the Masvingo-based abattoirs. They both rent farms near Masvingo town as holding and fattening areas.
August 21, 2014; http://www.herald.co.zw/montana-takes-over-carswell-meats/