The Rhodesia Trading Company
The Rhodesia Trading Company
The Rhodesia Trading Company was registered on the London Stock Exchange in 1903, originally as The Rhodesia Cold Storage and Trading Company Limited. It changed its name to the Rhodesia Trading Company Limited in October 1908, and was put into voluntary liquidation in August 1926.
The company was the creation of Major (later Sir) Frank Johnson (1866-1943). He had two objects in view: firstly, the amalgamation of a number of cold storage and trading companies in the new colony and Portuguese East Africa and, secondly, their association with a ranch in North Western Australia whence they could draw on supplies of fresh meat, transported in their own refrigerated ship.
The chief participants in the amalgamation were two Rhodesian trading companies, H.J. Deary & Company Ltd. and Arthur Suter & Company Ltd. Other African businesses involved were the Beira Cold Storage Company and the Rhodesia Supply and Cold Storage Company. The Australian company was the North West Australian Land and Cold Storage Company Limited.
It was the intention of the Rhodesia Cold Storage Company to start a subsidiary company wholly owned by itself, the Austral-Rhodesian Steamship Company, to carry meat from Australia as well as general cargo on the return trip from Africa with Beira as the principal port of entry for Southern Rhodesia. The extensive cold storage plant at Beira owned by the Mashonaland Railway Company (and formerly leased to the Beira Cold Storage Company) was brought into the new company. Cecil Rhodes had suggested the connection with Australia taken up by Frank Johnson. It was hoped that Australia might one day be a source of live as well as dead stock.
It was also hoped that the greater availability of meat would alleviate problems encountered in the recruitment of native labour for work in the mines. It had been found that money payments were an insufficient incentive to the Africans, but that improved rations might persuade them to stay for longer periods. It was therefore proposed that cold stores should be erected at the mines, supplied by the Rhodesia Cold Storage Company, so that meat could be regularly included in the labourers’ diet.
Each company in the merger were given a large block of shares. However, the valuation placed on these separate businesses was excessively high. The payments made for good-will were in all cases too much. As the company recorded increasing deficits, the original agreements came under increasing criticism which resulted in a court dispute that the Rhodesia Cold Storage Company had been deliberately misled as to the Beira Cold Storage Company’s profitability.
The commercial record of the Rhodesia Cold Storage Company, later the Rhodesia Trading Company was poor. After the company had been reconstructed in various ways, its name was changed in 1908 to the Rhodesia Trading Company to reflect the shedding of its cold storage business. A new debenture issue was planned for 1909 to afford the company a fresh start. A profit was not returned until 1908-9, when it was only £1,452. From 1909 to 1912 the company showed a profit, the best figure being £12,991 made during the eighteen months from September 1910 to March 1912. This trend was not maintained during the years 1913-15 with only small profits recorded during 1916-19. Adequate controls over stock and accounting were not developed until 1915.
Blunders in purchasing policy, inflated salaries, lack of capital for infrastructure, no systems required for the proper functioning of a business that had as many as thirteen branches at one time, all led to the company’s downfall.