Three government-owned agricultural companies are up for sale by the Rwanda Development Board (RDB), which is calling for private players to show interest before proceeding to bid for them.
These agribusinesses include Burera Dairy Limited, Nyabihu Potato Company, and Rutsiro Honey Ltd. In general, these firms are struggling with mismanagement.
In an interview with The New Times, Head of Communications and Marketing at RDB, Sunny Ntayombya said, “The government isn’t selling for the sake of it, we are interested in ensuring the actual improvement of the different businesses and the communities that depend on these businesses.”
He further added that the government is keen to bring the private sector to improve efficiency, capacity, and operational management. Also, bidders who are experienced in the field will be given more preference.
The Rwandan government is ready to give up about 98.03 percent of its shares in Burera Dairy. The firm which started operations in 2015 has been faced with a lot of challenges which eventually led to the halting of operations.
The dairy was part of a National Industrial Research and Development Agency (NIRDA) project that established several other factories in different districts to boost development. The factory, built by a Spanish contractor NORCROSS, was to produce nine milk products including cheese, yoghurt, and packed milk.
According to its business plan, the factory was to receive 2,000 litres of milk daily. However, when it opened, it could barely receive half. Also, the machine that was supposed to make yoghurt failed to operate and was abandoned. The cold room meant to preserve cheese did not work which led to the dumping of about 5,000kg of cheese produced during the trial period.
As for Nyabihu Potato Company, the government is willing to sell up to 98 percent of its shares after efforts to turnaround its fortunes failed. The over Rwf1 billion-factory makes products from Irish potatoes including chips, French fries, peeled potatoes as well as washed fresh potatoes.
The factory, launched in March 2016, was closed abruptly in the same month for lack of proper packaging materials. However, it reopened five months later when operators managed to get packaging materials from the Netherlands.
The potato company has the capacity to process about six tonnes of potatoes per day, but as of January 2018 was producing only about two tonnes per week. Officials had previously said it lacks proper management to optimize its productivity and its products have failed to penetrate the local market.
Lastly, Rutsiro Honey Ltd, of which the government own 60 percent, began operations in January 2018. Statistics show that honey production in Rwanda reduced significantly from about 5,000 tonnes in 2016 to 3,500 tonnes in 2017. However, the country targets to increase production to 9,000 tonnes per year by 2024.
A study by the National Cooperatives Confederation of Rwanda (NCCR) showed that some key issues affecting the country’s honey production industry include poor governance practices among cooperatives, lack of infrastructure in honey production, quality assurance as well as poor research and extension in control of diseases.
RDB notes that interested parties are welcome to take reasonable steps and visit the sites of these companies.
By Tobiloba Ishola