Savanna Beef offers more shares to producers

While Savanna Beef Processors (SBP) has just announced that it will offer cattle producers a third chance to buy further shares, a purchase agreement for a building site has also now been completed.

Mecki Schneider, the chairman of Beef Value Chain Forum (BVCF) task team as well as of Savanna Beef Processors (SBP), said several milestones had been achieved over the past weeks.

This includes that an agreement for the purchase of 25 hectares of land on the farm Teufelsschlucht near Windhoek has been concluded - subject to conditions, such as shareholders' approval.

In a letter to BVCF members and SBP shareholders last week, he added that certainty has been obtained regarding service provision by NamWater and NamPower, while an environmental clearance certificate has also been issued.

Shares

Schneider said SBP will soon offer producers another chance to buy shares.

"There is renewed interest among producers to buy more shares. So far, producers have acquired N$173.5 million worth of shares.

"An opportunity will be offered to buy up a further N$26.5 million worth of shares, with the hope that cattle producers can own 100% of the N$200 million share capital," he said, adding that this would increase SBP's negotiating power at banks and with other investors.

He added that their 2021 business plan has been updated with new financial models, better insight into marketing and the capital cost of the tender process.

"We are excited that we are in a much better and stronger position operationally, regardless of the increased capital costs. The internal rate of return has increased significantly to 43.7%."

Designs

Schneider added that two out of three tenderers from international abattoir designers have been shortlisted and they have been requested to adapt their designs to a specific capital layout.

He explained that the proposed designs that were received and analysed in April showed that the costs for building an abattoir had increased significantly. The task force expected that this would happen due to the higher costs of materials, energy, the exchange rate as well as inflation.

The newly submitted proposals are currently being analysed "to ensure the best design and optimise costs", he said.

He added that serious consideration is being given to developing the facility in phases, which will help it become operational in the shortest possible time.

Marketing

According to Schneider, in the meantime, hardcore planning has been done on the labelling of the product and on access to niche markets for primary cuts, while there have even been negotiations with large, international restaurant chains within Namibia.

He said SBP has been negotiating with Meatco since February for a marketing initiative where SBP will pay farmers directly in exchange for certain cuts of meat for international marketing.

Despite the parties involved having agreed on various terms and responsibilities, meetings with the minister of finance and the ministerial task team and the fact that a 22-tonne cargo container is ready to take the first shipment of certain cuts of meat to the European Union, no conclusion has been reached on the matter. Meatco's board has yet to make a final decision, he said.

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