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BDC shifts to large scale projects

SHARE   |   Monday, 24 August 2015   |   By Kabelo Adamson
Gaetsaloe briefing the media about BDC's future developments Gaetsaloe briefing the media about BDC's future developments PIC: OMANG KILANO

Botswana Development Corporation (BDC) will from now on invest only in large scale projects which are worth P30 million and above, the corporation’s Managing Director (MD) Bashi Gaetsaloe has said.
Gaetsaloe was speaking on Wednesday during a pre-launch of BDC’s 12,000 square metres Fairscape Precinct building at the Fairgrounds. Gaetsaloe described the building as of significant importance to their pursuit to become a profitable entity.
BDC, which is an investment arm of the government, has been involved in many projects across different sectors of the economy.
While other projects have totally been unsuccessful in terms of takeoff, BDC has in the past been accused of pushing efforts of the private sector to the brim by seeming to appear as a competitor to the private sector. This was because the corporation seemed to have lacked a clear path in terms of which project to invest in as the money was poured in every proposal that put to it, hence not getting any return on investment.
However, Gaetsaloe has this week made it clear that days of investing just for the sake of it are over. They will begin with investing on large scale projects only and only those which are viable. He dismissed allegations that BDC is in competition with the private sector, saying instead they are empowering them by establishing partnerships and later divesting to leave the private investors to operate on their own.
Gaetsaloe gave examples of the likes of Gaborone Sun and Avis as cases of how they empowered the private sector. The corporation announced last year following the arrival of Gaetsaloe that it is reviewing its strategy with regards to business portfolio and resolved to divest about 12 percent of its current portfolio and shed non-performing assets.
Some of the organisations that BDC has divested from include Asphalt Botswana where it held 48 percent of the shares. The corporation has also recently sold some of its assets to the highest bidder through public auction such as Golden Fruit Juice, Toro Lodge, Khawa Lodge and Cumberland Hotel among others.
Previously, BDC had shares in organisations such as Avis where it was the founding partner, Nortex, Gaborone Sun and Letlole La Rona (LLR) and has disposed interests in those companies.
BDC, which is currently implementing a five-year strategy, is on the right track to remain profitable, said Gaetsaloe who joined BDC in 2014.
Gaetsaloe emphasized that the corporation, with a balance sheet worth P3.6 billion and spread across 40 companies, will now put more focus on industrialisation and pioneer new industries, unlock value in the existing industries and stimulate private sector growth. In addition, the corporation will drive diversification and exports. The corporation is now eying the outside market as way of generating wealth outside the country.
He said many international companies have invested in Botswana and it is the time Botswana also did the same with its investments. The corporation, according to Gaetsaloe, will be making investments in the region, the rest of Africa as well as the whole world. The process has already started as Gaetsaloe said they have already built partnerships across the world.
Established in 1970 and 100 percent owned by the government, BDC has embarked on an ambitious strategy to turnaround the business. In the previous financial year, BDC’s group revenue went down by 10 percent and was blamed on challenges and changes that the organisation is grappling with within its subsidiaries and associate company structures.
The organisation is expected to release its latest financial performance in a two months’ time with expectations of better ones.
While BDC will continue to look locally and outside for opportunities to generate wealth, the Fairscape Precinct will be one of the cash cows for the organisation. Apart from office space, residential and retail, the Fairscape is envisaged to house a five-star hotel within the area.
The concept of consolidating all these places within one area is to uphold the spirit of work, play and relax in one environment, according to Gaetsaloe.
The hotel development is contained in the Phase Two development of the area and negotiations have already started with some international hotel operators to lease the area and construction on the building will commence later this year.

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