Commercial slaughtering plummets by 45%

17 May 2018 | Agriculture

Declining cattle volumes and rising overhead costs are threatening the sustainability of the current Meatco business model.

Elaborating on the challenges the company is facing, Meatco's executive for stakeholder relations and corporate affairs, Vehaka Tjimune, said in a presentation that the number of commercially farmed cattle slaughtered by Meatco has been slowly declining.

A decline of nearly 45.5% in the number of cattle from commercial farms slaughtered at Meatco has been recorded since 2016. The number of cattle slaughtered south of the Veterinary Cordon Fence declined by more than 10% during the same period.

“The gap has been increasing steadily. Pasture-raised cattle only comprise 43.7% of the total throughput at Meatco,” said Tjimune.

Meatco plans to increase throughput at abattoirs and feedlots are planned for the south, Kavango, Omusati and Oshana regions.

Tjimune was speaking during a familiarisation visit by agriculture minister Alpheus !Naruseb to Meatco.

He said another challenge for Meatco was a lack of working capital caused by serious cash-flow constraints.

The underutilisation of existing slaughter capacity, weaner exports, a lack of markets for meat from the Northern Communal Areas, and regulatory issues are also challenge, Tjimune mentioned.

!Naruseb told the Meatco board and its management team that they should start with a clean slate and not dwell on past mistakes.

He said they were there to work on advancing the company in order to serve the nation better.

Former agriculture minister John Mutorwa did not always see eye to eye with the Meatco board and management, resulting in a lot of controversy over the years.

!Naruseb said he was familiarising himself with all state-owned enterprises falling under the agriculture ministry.

“I am primarily here today to learn what you are doing, how you are doing it and to see where we can draw some synergies between my responsibilities as minister and Meatco,” he said.

Tjimune said the company's annual revenue amounted to N$1.4 billion. Based on audited figures of January this year, the company made a loss of N$42.9 million.





The company generated N$795 million in foreign sales in comparison to N$1.2 billion the previous year.

In terms of value, the international market accounted for 56% of Meatco's revenue, while more than 40,3% of the production volume was sold locally in Namibia.

In addition, 53.12% of all beef revenue was returned to producers in the form of the producer price.

Meatco had a market share of approximately 17% of the Namibian cattle market, said Tjimune.

He said the company's slaughter capacity consists of 250 cattle a day at its Windhoek abattoir, while the mobile slaughter unit can slaughter 25 cattle per day. The Okahandja abattoir has been turned into a cold-storage unit.

Figures from 2016/17 indicated that Meatco expected to slaughter just over 95 400 cattle during the reporting period, but ultimately slaughtered only 91 558.

The production capacity of the Meatco tannery is 980 hides per day while there are 14 500 cattle standing at its feedlots.

Tjimune said the mobile slaughtering unit in the northern communal areas has a lot of benefits. Because it brings an abattoir to the farmers, it puts less stress on the animals and also uses local labour.

Other benefits include lower production costs and improved food hygiene and safety standards.

“It operates within the areas which have been closed off due to FMD and access better quality cattle currently not slaughtered through the formal market,” said Tjimune.

The unit can also be used in areas south of the Veterinary Cordon Fence and for game.

ELLANIE SMIT

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