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Meatco could lose export market – CEO

17 August 2018 Author   Kaula Nhongo

Meatco Acting Chief Executive Officer, Jannie Breytenbach, has warned that the meat processing and marketing company could lose its lucrative export markets in Europe if cattle numbers available for slaughter continue dwindling. Meatco Acting Chief Executive Officer, Jannie Breytenbach, has warned that the meat processing and marketing company could lose its lucrative export markets in Europe if cattle numbers available for slaughter continue dwindling. 

Breytenbach, who is also in charge of operations at Meatco, said the company is struggling to serve its export markets and the situation could become dire if cattle numbers do not improve. 
In June, Meatco Chairperson, Martha Namundjebo-Tilahun bemoaned the ever-growing trend of exporting livestock on the hoof, which saw a total of 315,198 cattle leaving the country in 2017 compared to 164,220 in 2016, saying such a trend is worrisome as it negatively impacts on the availability of livestock for throughput at local abattoirs.
Breytenbach also said this week that the shortage of animals available for slaughter has made it difficult for Meatco to keep the premium market open. 
“We do face a risk of losing the market, but currently we are managing it,” he said.
Breytenbach said Meatco has supplied about 50 to 60 percent of the current overall order of both the EU and the Norwegian markets.
“We are in conversation with our clients and they are sympathetic to our situation. We need to increase the cattle numbers we are getting as well as concentrate on the turnaround strategy to solve these problems,” Breytenbach said. 
Namibia currently exports its highly sought-after free range beef to many countries, including the European Union and the lucrative Norwegian market. 
Meatco was expected to ship its first consignment of beef to the United States of America (US) by the end of July 2018, but the company failed to meet the deadline due to some inexplicable delays.
It remains unclear whether Meatco will be able to start exporting to the US as the China deadline is fast approaching.
Namibia was granted access to the American market in 2016, but was waiting for labelling approval to start its beef exports.
Under the US export rules, Namibia is eligible to export to the US boneless (not ground) beef raw products such as primal cuts, chucks, blade, and beef trimmings.
Meatco’s troubles come at a time when it has lost favour with commercial farmers who are said to be withholding cattle in protest against the current board.
The commercial farmers are said to be withholding their cattle mainly because they are unhappy with the decision not to appoint their representative on the Meatco board following the resignation in February of commercial representative, Fannie Oosthuisen.
Sources say that Oosthuisen resigned due to disagreements with the current board, in particular because of the board’s position to request the ministry of agriculture to close borders for weaner exports.
Breytenbach refused comment on the alleged sabotage by commercial farmers, saying it is a sensitive issue.
“Part of our strategy is to mend relationships. The focus area is to build trust with our stakeholders. A detailed communication plan will be introduced in October, November,” he said. 
Talk around town is that the current challenges facing Meatco might jeopardise beef exports to China planned for September and exports to the United States of America.
China finally agreed to lift a clause on Lumpy Skin Disease (LSD) which previously prevented Namibia from exporting its beef products to the Asian economic giant due to an LSD outbreak in 2016.
Namibia will be the first African country to export bone-in beef to China.
During the 2017 financial year, Namibia through Meatco, exported 85 percent of its meat industry products, realising N$2 billion.
In the same period, the country exported 2,77 million cattle, 1,97 million sheep and 1,79 million goats.
Meat Board of Namibia figures show that in terms of cattle, 150,000 weaners were exported to South African feedlots, while 130,000 steers were exported to other markets, as well as sold to local abattoirs.
In terms of beef, 37,000 tonnes were exported, with South Africa receiving 9,400 tonnes and the European Union, United Kingdom, EU and Norway getting 9,500 tonnes.
Previously, the Norway quota was allocated on a 50:50 basis to Witvlei Meat and Meatco, but the then Minister of Trade and Industry, Calle Schlettwein, reduced Witlvei Meat's export quota to Norway from 800 tonnes to 300 tonnes.
Witvlei’s quota was then slashed in 2014 leading to the company’s demise as it failed to stay afloat.
Witvlei Meat has been embroiled in legal disputes with Agribank over ownership of the factory where it operated from. 
In 2014, the Windhoek High Court ordered the company to move from the premises they were leasing from Agribank, but the ruling was later overturned in the Supreme Court which instructed Agribank to reinstate Witvlei meat.
Agribank had been leasing the abattoir to Witvlei Meat company since 2006 with an agreement that the company will purchase the facility at the then market value of N$15 million under specified terms and conditions.
However, the purchase agreement that was meant to transfer the ownership to Witvlei Meat was breached due to non-performance by that company and thus lapsed on 26 June 2015.
Last year, Witvlei sued the bank for failure to meet a deadline set by Witvlei Meat to conclude a settlement agreement.
The case is still in court.
According to Agribank, the Witvlei Abattoir is still owned by the bank.
“We confirm that the Witvlei abattoir remains a property of Agribank. The bank is currently in court for eviction proceedings against Witvlei Meat (Pty) Ltd. The matter is therefore sub judice. The bank will take a decision on the best use of the property when the court matter is finalised,” the bank stated.

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