Meatco ‘saved farmers during crisis’

While the state of the company has recently come under the spotlight, Meatco CEO Mwilima Mushokabanji says it saved livestock farmers during one of the most difficult times the industry has ever faced.

“If we did not have Meatco when we had a drought of 2019/2020, we would have had a crisis in the industry, but Meatco was there. We generated N$1.7 billion and we were able to look after farmers in the country during the most difficult period.”

Mushokabanji said this in an interview with Namibian Sun after agriculture minister Calle Schlettwein this week questioned the future of the company. Agriculture unions have also come at Meatco for sidelining communal farmers.

Mushokabanji explained that Meatco needs to slaughter at least 60 000 to 65 000 cattle to be profitable and to operate the Windhoek abattoir.

“So, throughput is very important.”

He added that Meatco’s challenges already started in 2013 when the country was hit by drought.

Risk

“When you are hit with drought, it naturally means that the number of cattle declines and also the quality of cattle that comes into the abattoir.”

Mushokabanji said the worst drought was experienced in 2019/2020, however, this was the year Meatco slaughtered the highest number - over 116 000 head of cattle.

“But at the time we had no choice, because farmers were advised to destock. This meant that they had to sell most of their cattle, because of they did not, they would not have feed.

“The best practice in farming is therefore to reduce cattle, but they did not have outlets.”

He said Meatco basically bought all these cattle.

“But the risk we were taking there was that we were buying poor cattle. We took a strategic decision and said ‘can we rather reduce the price?’ [Either] we generate billions at the cost of the farmers, or we save the farmers so that in the future we can still save primary production.”

Mushokabanji said Meatco’s revenue during that period was at its highest - N$1.7 billion, of which N$1.1 billion was paid to producers.

“And many farmers actually appreciate that intervention. So, we are in touch with the farmers.”

50% national herd lost

In 2019/2020 the country lost 50% of the national herd due to the drought, he said.

“So, come 2020/2021, we did not have sufficient cattle. We only slaughtered about 35 000 cattle and that affected our business. From 2019/2020 up to basically last year, these past two years have been the toughest, because on average we only slaughtered 35 000 cattle.”

He, however, added that they are currently seeking cattle.

“We are looking for cattle now and we can buy cattle at any time. We need cattle, actually.”

Pandemic woes

Meanwhile, Mushokabanji said on top of the drought, they were also affected by the Covid-19 pandemic which hit most of the luxury economies and their markets, which are China, the United States of America and Europe.

“With cattle numbers being low over the past two years, we therefore need to realign the business and had very strong cost-cutting measures.”

He further stressed that the company has managed to pay back all its historical debt except for about N$400 million owed to the Development Bank of Namibia.