The Cameroonian Cotton Development Firm (SODECOTON), which is in dire financial straits, has resorted to acquiring for the sixth consecutive year a syndicated loan of CFA 30 billion from five local banks for its recovery, reliable sources claimed on Sunday.This amount was out of an estimated CFA 75 billion required to cover the 2015-16 farming season, according to the sources.
The loan, which could be increased to CFA 40 billion, now makes it compulsory for the company to apply other strategies to meet its obligations, not only with an estimated 225,000 producers, but also impact suppliers and others in the production chain.
Since 2010, SODECOTON, which was abandoned by its traditional donors, has been using other funding facilities to sort out liquidity problems usually attributed to export delays in its shipments of white fiber.
In early 2015, it obtained CFA 36.5 billion from the same banks, depending on export contracts with traders on the international market.
Apart from fluctuating world prices, the company, which exports 80
percent of its produce, must also fight the fraudulent sale of cotton filaments to neighbouring Nigeria by producers who have nevertheless benefited from financial support.
SODECOTON, whose 2014-2015 production reached 295,000 tons, signifying an increase of 74,000 tons compared to the previous year, has for the past three years been conducting studies for the introduction of genetically modified seeds in the north of Cameroon, where it employs 11,000 people, with the ambition of increasing the production of fiber and seeds.
Set up in 1974, its capital of approximately CFA 23.6 billion is 59 percent owned by the Cameroonian government, 30 percent by French firm Geocoton and 11 percent by Cameroon’s Movable Investment Corporation (SMIC).