‘All I want is to help farmers’

‘All I want is to help farmers’

THE wool and mohair sector has become a political and legal battlefield in the past few weeks. The Lesotho National Wool and Mohair Growers Association (LNWMGA) accuses the government of tinkering with the rules to benefit Maseru Dawning (Pty) Ltd, a Chinese-owned company that has a bitter relationship with the association.
The association says there is an ulterior motive to push out BKB, a South African company that has been buying wool and mohair from the farmers for the past four decades. Accusations have been flying back and forth as each party tries to defend its turf in the lucrative industry that has annual revenues of around M300 million.

BKB says it’s being pelted with trumped up charges by politicians who want to shore up Maseru Dawn’s fledgling business. The government says it has changed the rules to benefit both the farmers and the economy.
But what has been missing from the fiasco is the voice of Stone Shi, the owner of Maseru Dawning, who has been accused of hobnobbing with politicians to give his company an unfair advantage. \

thepost’s business reporter, Lemohang Rakotsoane, last week spoke to Shi about the allegations. She started by asking him about history of his now sour relationship with the wool and mohair farmers.

I came here February 2012 after being invited by the Lesotho National Wool and Mohair Growers Association to talk about the wool and mohair business. I was taken to see shearing sheds to see the quality of the wool and mohair.
When they invited me here they said they wanted to cut out the middleman and reduce costs incurred by farmers so that they get better revenue which would then enable them to increase production. They were interested in my experience in the wool and mohair industry.

I have worked in this industry straight out of university. I have contacts in Italy, Pakistan, India, Australia and South Korea. I am a Vice Chairman of the Chinese Wool and Mohair Textile Factories Association.
In July that year I met a delegation made up of the then Minister of Finance Leketekete Ketso, CEO Lesotho National Development Corporation (LNDC) Joshua Setipa, the former ambassador to Beijing and CEO of LNWMGA Lefu Lehloba and the association’s chairperson Mokoenehi Thinyane.

What followed thereafter?

In 2013 the two countries (Lesotho and China) signed a Memorandum of Understanding regarding the exportation of Lesotho’s wool and mohair to China.

I then came back in 2014 to continue with the talks and in 2015 we had agreed to start a centre to export wool and mohair that will offer farmers better revenue and translate into more sheep and more production.
In May 2015 the chief executive and chairperson of the association together with one member of the executive committee attended the international wool and mohair conference in China.

After the conference we signed a joint venture agreement that indicates that we would start with the wool store and later venture into other aspects of the value chain like wool scouring.
We then started with plans for the construction of the centre and in December 2016 and we received our lease for the site in Thaba-Bosiu.

The centre would store wool and mohair and sell directly to factories in China, Italy, Australia, etc. For the construction the association designated four members to form a sub-committee to work with me.
The first phase of the construction being the wool centre which cost M55 million. I contributed M37 million while my partner, the association, contributed four million and the balance is yet to be paid.

To my surprise upon the end of the construction in September the association stopped communicating with me. They suspended the sub-committee that I used to work with and gave me new people who were always angry at me for reasons unknown to me.

They ignored communication from me and when I went to their offices with my translator we were told to leave. I was shocked because even though I sensed that something changed or happened I did not know what it was.

Did you eventually find out what was the problem?

I had fulfilled my end of the deal and my partner was supposed to bring the wool as agreed upon in our discussions and joint venture agreement but was even reluctant to talk to me. At some point I even asked for wool from one district for a pilot project but they refused.

They refused to forge a way forward with me. The people who invited me here do not like me anymore. They walked away without an explanation and left me all alone here. Even two months ago I wrote them a letter seeking a meeting to discuss issues concerning the wool centre but they refused.

I felt stranded and did not know what to do. We were supposed to start business. How could we let the centre stay empty when millions have been invested? I felt stuck in a foreign country, not knowing what to do.
The government I came under was no more and in this government I knew no one. I went to seek assistance from the Chinese embassy and they introduced me to the government. Initially this government did not know anything about the centre.

We were not giving them any reports. They sat down and listened to my story and made their own investigations.

Is it true that you are being favoured by politicians who have changed the law to help you get ahead in business?

I really cannot emphasise enough that I am a simple businessman who has nothing to do with the ABC (All Basotho Convention) government or politicians. I am not here for politicians but I am here for farmers and my business.
All I want is for the farmers to know that this is their facility, operate it smoothly and make money so that we can contribute to economic development of this country.

I am also being accused by those who are not members of the association of having had something to do with the new regulations. That is preposterous.
How can a Chinese man, a foreigner, make regulations for a country? I had nothing to do with the regulations. They were made by the government, not me.

I don’t even think they are in my favour. Any company can come here, even the BKB or CMW and venture into the same business. The only thing I can say is maybe I am lucky because I am the first to invest heavily in this business. But at the moment I do not feel so lucky because only a few farmers are supportive.

During the wool season in the pilot project only over a 1 000 farmers brought their wool here. In order for the centre to operate to its maximum potential we need more farmers to bring their wool and mohair here.
That fraction is very small when taking into consideration the amount of farmers in this country. Most of them are small-scale farmers hence we only had 800 bales for the pilot project.

Sometimes I really want to cry because I invested a lot of money and I don’t know what is going to happen. Things need to improve. They cannot remain in this state.

At some point I wanted to quit and just go back home but the few farmers that have shown me support have encouraged me to forge forward. I still have a big worry about what will happen. In fact I am scared in Lesotho.

How will the centre benefit Lesotho’s economy?

The centre when fully operational can bring in US$40 million (about M549.8 million) every year boosting the economy, creating jobs and improving the lives of the farmers. It can also save the VAT and develop the wool and mohair business in Lesotho.

If this is a good deal then why are farmers fighting and rebelling against it?

I want farmers to understand me and realize that the centre is theirs. Most of them do not know that this centre is theirs. I have heard people saying it’s owned by a Chinese. That is not the case.
The association has 75 percent shareholding and I only have 25 percent. It is confusing because even those who invited me here are the ones referring to me as a Chinese man yet from the beginning they knew I was Chinese. They even went to China. Why are they acting surprised now?

I am here for them not politics. They are the engine of this business and I need their support. I need them to give me a chance to prove myself, a chance to show that I can deliver.

I think farmers should not be dragged into politics. They need to focus on their production. This centre is not different from a baby; it needs their support to grow. Without them it will die in its infancy.

Farmers, at least those who have been showing me support, are happy to work with me. The problem lies with the association. Most farmers are part of the association and therefore they listen to the association. However, more and more farmers are starting to learn the truth and bring their wool here.

How are you different from BKB?

Farmers will no longer get paid after six or seven months. They get paid after three months and get better revenue. In the pilot project they got from M80 to M90 per kg, something they never got before. They are happy.
We just need more to come and support us. The centre makes their lives easier as they do not have to pay hefty transportation fees, brokerage fees, storage and rent while waiting for auctions in Port Elizabeth because we sell directly to the factories in China.

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