Mohalenyane Phakela
WOOL and Mohair auctioneers, BKB, have registered a local company, BKB Lesotho in a bid to save its business interest that was under threat after indications that government is moving to block the selling of the products in South Africa.
The government is drafting legislation to block foreign companies from playing the middleman role for local farmers in South Africa which has prompted BKB to register a local entity.
For the past 44 years, BKB has been selling wool and mohair on behalf of 40 000 local farmers through an auction in Eastern Cape.
However, the current government has argued that the process disadvantaged Lesotho as the country does not get any taxes from the company.
In October last year, a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Maseru Dawning established the Lesotho Wool Centre (LWC), located in Thaba-Bosiu, from where wool and mohair would be sold.
Although not yet operational, the 10 000 square metres centre, which has the capacity to store at least 8000 tonnes of fabric has attracted a M 55 million investment to develop. M4 million was contributed by LNWMGA while the rest came from Maseru Dawning, which is owned by a foreign investor, Stone Shi. LNWMGA is said to hold 75 percent of the shares while Maseru Dawning owns the remainder.
According to the Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori, a bill that is being drafted will only allow the sales to be done between the farmers and the overseas buyers as a way of ensuring that the farmers earnings are maximised.
He said this would help the farmers to have direct access to the market.
“The centre in Thaba Bosiu was erected by a joint venture between the farmers who have a larger stake in the sector, or rather are directly affected by anything that happens in the sector,” Mr Phori said.
“The ministry’s mandate is to protect and help the development of small and medium enterprises and the cabinet has already given us a green light to establish a law which will bind farmers to sell from the centre in Thaba Bosiu.
“We have already conducted a study and we discovered that a large market of wool and mohair exists in Europe and Asia so we will be shipping straight to those continents to maximise the profits. Just like we have already closed borders for importation of meat, the move is meant to create jobs locally through our own resources and ensure money circulates within the country.”
The minister also said the centre would grade the wool and mohair instead of the current arrangement where BKB is responsible for grading. He also said BKB would not be barred from conducting its business as long as it is registered as a taxpayer in Lesotho.
BKB general manager, Isak Staats, said they completed their company registration in Lesotho last month as they have no intension of disserting their longtime clients. He said the future of Lesotho’s wool and mohair was economically positive.
“Our relationship with producers goes back more than 40 years. During this time, we have been given the opportunity to prove the value that we add for our producers in giving them access to a transparent international wool selling platform and to make friends in the industry.
“The future of wool and mohair in general and specifically in Lesotho is incredibly positive.
“The world market has a massive appetite for natural products, produced sustainably, by people that have a passion for what they do. It is truly an international trade that depends on high levels of integrity and excellent systems,” Mr Staats said.
