Foreign firms get dairy import rebate

Namibia Dairies says the introduction of a tariff rebate facility, by the Ministry of Agriculture, Water and Forestry (MAWF), for selected dairy products imported from outside the Southern African Customs Union (SACU), will not promote the dumping of dairy products into the country.
The MAWF announced this week the availability of rebated dairy import quotas for butter, cheese, skimmed milk powder and whole milk powder, starting in October 2016 to September 2017.
These products will be limited to 400, 300, 700 tonnes and 400 tonnes, respectively.
The tariff rebate facility allows limited quantities of dairy products from outside SACU to be imported into Namibia duty-free.
The MAWF said the facility was open to companies that have joint venture agreements with registered local macro, small and medium enterprises.
The development has been criticised previously by some sections of society, who felt it would trigger an influx of cheaper and lower quality products into Namibia, and that it would be detrimental to the ‘Growth at Home’ strategy, which seeks to empower local producers and position them to compete with international brands.
Namibia Dairies Managing Director, Gunther Ling, however, told the Windhoek Observer, that they are not worried about the introduction of the rebates.
“It’s not a new matter, as government notified the dairy products producers sector and then allowed rebated import quotas on the named products,” he said.
“Namibia Dairies does not produce any of those products and there is also no other manufacturer in Namibia that does so. Butter and cheese is, however, produced locally on a smaller scale by farmers or smaller dairies. This, however, in my mind would be very small volumes.
“It is possible to make these products locally, but this would require high capital investments and this is opposed by a low economy of scale, as well as shortages of excess raw milk,” he said
The Namibia Dairies MD said it is important to note that Namibia has an open market for any dairy products, which meant that anyone can import any volumes of dairy into the country.
“The Namibian dairy sector is therefore not a protected industry for two years now, allowing full, free importation. Many consumers are still of the opinion that the Namibian dairy sector is still receiving protection.
“The quota regulations on milk and yoghurt were only in place for one year, which was between August 2013 and August 2014.”
Ling said further that there were not enough raw milk supplies to sustain the production of the products, but they may become an opportunity in the long-term.
“Namibia Dairies did produce its own cheese and cottage cheese a few years ago.  This was discontinued, due to the low prices that we had to compete against, of imported cheese from South Africa.”
He said the raw milk production at milk farms in Namibia is currently at very good levels, while Namibia Dairies, which buys raw milk from Namibian farmers to process and distribute and sell nationally, had sufficient production capacity. 
Namibia has embarked on a drive to boost its local manufacturing industry, with several policy reforms having been tabled under the Harambee Prosperity Plan, and the recently launched Retail Charter, both of which target smaller manufacturers gaining access to finance facilities and retail space in local shops.