Meatco makes plans for lean year

13 January 2020 | Business

Meatco is working on various strategies to counter the difficult year ahead, when herd rebuilding will be taking place after the severe drought of the past several years.

This is likely to drastically decrease throughput at Meatco's abattoir. Meatco acting board chairperson Ronald Kubas says the company expects this year to be very difficult with regard to slaughtering numbers, as farmers will be rebuilding their herds.

“We must therefore ensure that Meatco remains sustainable.”

According to him, various strategies are being put in place to ensure that Meatco stays afloat.

Kubas explained that a large portion of the national herd was slaughtered during the drought period and therefore farmers will now start with herd rebuilding.

“This will decrease slaughter numbers at Meatco, but a strategy is being developed to buffer this.”

He said projections of the expected slaughter numbers would inform the company's business strategies and cost projections.

According to Kubas, they have visited Botswana to see whether Meatco can acquire animals from that country. Meatco has also been in discussions with the agriculture ministry on the possibility of acquiring animals from the northern communal areas. Another possibility is more cattle rearing by producers and feedlot systems.

“Meatco's biggest challenge is always throughput (raw materials),” said Kubas.

He said Meatco had proven its strategic role in the agriculture industry by slaughtering over 115 000 cattle in 2019, in an attempt to assist farmers during the drought. In 2018, Meatco slaughtered 63 000 cattle.

“Meatco slaughtered almost 85% more than the corresponding time for the previous year, while keeping prices stable.” Kubas further commented on the Chinese market, and said that Meatco last year sent 130 containers of beef, equivalent to 3 000 tonnes, to China.

“China is a very lucrative market for us. The demand is massive. The other positive is that they make upfront payments and want bone-in beef, which also reduces cost at the factory,” said Kubas.

The challenge would be to slaughter enough cattle to meet the Chinese demand, he pointed out.

According to Kubas, Meatco contributes between 40% and 50% to the agricultural Gross Domestic Product.

“The company is a very important foreign exchange earner for the country and critical for the livestock sector.” He said despite the challenges faced by the domestic economy, coupled with the persistent drought, Meatco managed to remain viable and contributed to the agricultural sector.

“In particular, the organisation boosted the local economy by paying over N$1.1 billion in producer prices to cattle producers.”









ELLANIE SMIT

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