Meatco welcomes new competition

Meatco has welcomed the opening of a new meat processing plant in Namibia as it is failing to meet the demands of its markets.

This is according to Meatco CEO Mwilima Mushokabanji, who said that Meatco welcomes incoming competitors and views them as healthy competition.

He said that there are enough resources in the country.

"We are failing to meet the expectations of our markets. Therefore, if we have any processing plants that should join us, they are welcome."

Hard hit

Mushokabanji said while countries such as South Africa and Botswana have lost some of their export markets, Namibia did not and has maintained its competitiveness.

"We are still exporting to China, Europe and the USA."

Meatco slaughtered 28 000 cattle year-to-date, compared to the same period last year when the company only slaughtered 17 000 cattle.

It only slaughtered 35 000 cattle during the 2021/2022 financial year because of a scarcity of raw material due to the impact of the 2019/2020 drought.

Mushokabanji said Meatco was particularly hard hit in 2019/2020.

"It was the worst year in terms of drought. We basically slaughtered 116 000 cattle because farmers were advised to make sure that they destocked. That they sell their cattle, otherwise the animals are going to die."

Remain competitive

Meatco’s revenue during that financial year was N$1.7 billion, while producers were paid N$1.1 billion.

Mushokabanji said Meatco's mandate is to stabilise the meat industry, which involves ensuring that producers are paid competitive prices.

"Because then it means we are able to sustain primary production. When primary production is blooming, when farmers are able to maximise realisation on the farm because Meatco pays them competitive prices, then Meatco is sustainable because, ultimately, we are able to have good quality cattle that are coming into the abattoir."

He said in 2019/2020 Namibia lost 50% of the national herd of 2.5 million cattle.

"The past two years have therefore been the toughest for Meatco, because one of the sources of sustainable competitive advantage for Meatco is basically throughput."

Luxury markets crucial

Mushokabanji said the slaughter capacity at Meatco’s abattoir is 120 000 cattle per year, but to break even and have a profitable business, at least 60 000 cattle need to be slaughtered and exported into luxury markets.

He said Meatco has put in place strategies for the company to survive.

"Many agro-processing plants in advanced economies such as the US and Europe actually closed. Because once there are no cattle coming to the abattoir, it will close."

"Since 2019 up to now we have spent to N$2 billion and this was specifically only to the farmers south of the Veterinary Cordon Fence."

Transformation

He said that Meatco wants to transform Namibia from being an import-led economy to being an export-led economy.

"An export-led economy is a country that beefs up primary production of its natural resources, adds value to those products, and then exports value-added products."

He added: "When you are able to export more than you import, you are able to have a positive trade balance and that is how economies are sustained. Meatco will play that critical role to make sure we export more than we import."