Government to privatize three agribusiness firms

Government is ready to cede over 98% of its shares in Burera Dairy. File.

Rwanda Development Board (RDB) has put three government owned companies up for sale calling for expression of interest by private players.

The three firms, all in agribusiness include Burera Diary Limited, Nyabihu Potato Company and Rutsiro Honey Ltd.

In Burera Dairy, the government is ready to cede up to 98.03 per cent of its shares in the firm, which started operations in 2015.

The firm is marred by various challenges, which have led to the halting of operations, hurting the fortunes of dairy farmers in the region.

Earlier in the year when President Paul Kagame visited Burera District, officials from National Industrial Research and Development Agency (NIRDA), Rwanda Development Board and the Business Development Fund (BDF) were at pains to explain why operations had stalled operations.

Among the challenges, the firm is grappling with is mismanagement. 

Government is also keen to sell up to 98 per cent of its shares in Nyabihu Potato Company after efforts to turnaround its fortunes failed.

The factory was found to lack proper management to optimise its productivity and its products have failed to penetrate the local market, officials have previously said.

The factory has capacity to process about six tonnes of potatoes per day, but as of January 2018 was producing only about two tonnes per week.

The over Rwf1 billion-factory makes products from Irish potatoes including chips, French fries, peeled potatoes as well as washed fresh potatoes.

As for Rutsiro Honey Ltd in which the government holds 60 per cent began operations in January 2018.

Though The New Times has not yet established key shortcomings at the firm, beekeepers in Western Province where the firm is located continue to grapple with low production.

Statistics show that honey production has decreased significantly from about 5,000 tonnes in 2016 to 3,500 tonnes in 2017. The nation targets to increase production to 9,000 tonnes per year by 2024.

A recent study by the National Cooperatives Confederation of Rwanda (NCCR) showed that among key issues affecting the sector include poor governance practices among cooperative, lack of infrastructure in honey production, quality assurance as well as poor research and extension in control of diseases.

Interested parties in Nyabihu Potato Company and Burera Diary Limited have until September 20, to express interest while bids for Rutsiro Honey Company close on September 30.

Sunny Ntayombya, RDB's Head of Communications and Marketing told The New Times that the government is keen to bring on board the private sector to improve efficiency, capacity and operational management.

“We are not only looking for the highest bidder but one who has the best plan to improve the business they bid for. If the bidder has experience in that particular area, then they will be given preference."

"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,” Ntayombya said.

RDB could, however, not comment to the performance of the companies, but noted that interested parties were welcome to do due diligence and visit the sites.

“If a potential investor wants more sensitive information, then we sign an NDA with them and provide the required information to the extent  possible,” he said.

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