…165 could lose jobs
WITVLEI – A reversal of the Cabinet decision of 2010 to split the beef export quota to the lucrative Norwegian market on a 50:50 basis between Meatco and Witvlei Meat will result in shareholders of Witvlei Meat losing an estimated N$15 million. This could also result in the immediate closure of the Witvlei Meat factory.
Such a reversal, as requested by Meatco last week, will leave 165 Witvlei Meat employees jobless and deprive some 600 dependants of their main source of income in the Omaheke Region, one of the regions that already experiences some of the highest unemployment figures in the country. The mere possibility of Witvlei Meat being muscled out of the export market to Norway sent shockwaves through the dusty streets of the village of Witvlei village on Monday when the future of Witvlei Meat was put under the spotlight during the private company’s annual Open Day and year-end function.
While Christmas decorations and presents reminded the staff of the factory that the festive season is upon them, they also had to listen to the harsh realities when the chairperson of the Witvlei Meat company’s board of directors Sidney Martin and the managing director, Hendri Badenhorst, spelled out the consequences of Meatco’s request for Cabinet intervention to change the current allocation from a 50:50 formula to one that will be based on slaughter numbers. Based on that decision Witvlei Meat will receive between 5 and 6 percent of the Norwegian quota a disastrous prospect for the company and its employees. Both Martin and Badenhorst stressed that the continued viability of Witvlei Meat and the jobs and livelihood of its employees depend on the export quota established in partnership with Nortura in Norway.
Martin said it is unfortunate that in a country like Namibia “we still have people with short-sighted vision, even when it was made very clear by weekly advertised prices how much Witvlei Meat pays out to producers. While representatives of Nortura, Knud Daugaard (Nortura director/NoriDane chairperson), Martin Ravin (director of NoriDane for Norway and Denmark) and Thomas Orgaard (Nortura representative), assured Namibian producers who slaughter with Witvlei Meat that their beef is in high demand in Norway, Martin said they cannot understand why Meatco wants to ruin Witvlei Meat as the biggest employer in the Omaheke Region. He said Daugaard proved to the audience that Namibian producers slaughtering at Witvlei Meat earn maximum prices for their products in Norway with Nortura supplying all the biggest retailers in Norway. Martin said since the allocation of the Norwegian quota on a 50:50 basis was introduced, Witvlei Meat returned to profitability. “If Cabinet is to reverse the current 50:50 formula, it will have a long-lasting effect on the Witvlei community with far-reaching consequences for the meat industry that will revert back to its monopolistic past,” he noted.
Meatco says in its most recent proposal to the Meat Board, which acts as facilitator for the allocation of the quota before a submission is forwarded to Cabinet for approval that “the current allocation formula is not only inequitable, it also fails to benefit the majority of Namibian producers and basically excludes producers from communal areas.”
Badenhorst pointed out that Witvlei Meat can only benefit producers outside the Northern Communal Areas due to existing veterinary restrictions. “But we have advertised our weekly prices in the press, specifically bringing the price of animals most commonly produced by communal areas in line with commercially produced animals, therefore paying the same price for Grade C as Grade B animals. On most occasions this has amounted to a premium of between N$6 and N$8 per kg or N$1 200 to N$1 600 per animal,” he noted.
The acrimonious stand-off between Meatco and Witvlei Meat over the 50:50 formula was recently joined by a third party and newcomer to the Norway export market, Brukarros Meat Processors (BMP), who applied for 200 tonnes of the quota. BMP does not yet qualify in terms of EU requirements, but has applied for qualification and has given an undertaing to be ready when the quota for 2014 is announced by Cabinet early in the new year. Meatco says in its submission to the Meat Board that “the current structure of Witvlei Meat results in effective outflow of wealth and funds from Namibia.” However, Badenhorst dismissed that saying Witvlei Meat never declared a dividend since its inception in 2006. “We will only be in a position to declare a dividend in another five to seven years from now, and even then it is most likely to be re-invested in Namibia,” he asserted. Last year Meatco exported only 3 percent of its total production to Norway, while Witvlei Meat exported 73 percent of total production. Witvlei Meat expressed satisfaction with the 50:50 formula, but Meatco argues the current allocation detracts fundamentally from the very purpose for which the Norwegian government extended this facility to Namibia, namely to benefit the greatest number of Namibian producers.
Meatco wants a review of the 50:50 sharing formula for the 2014 quota allocation, arguing that in terms of the volumes it slaughters it cannot share the quota equally with Witvlei. Meatco further stresses that the current equal allocation is grossly discriminatory against 94 percent of Namibian producers who market their cattle through Meatco, and is therefore, morally and legally indefensible. In defence Witvlei Meat says it pays about N$12 million per year on all consignments it receives from producers, and has set itself the goal of listing its shares publicly on the Namibian Stock Exchange in the near future. The company further says the benefit of competition in a free market system should be weighed up against a monopolistic system, since it is only the through the benefit of competition that national prices be boosted. The company further points out that if it loses the ongoing court battle, it will take its hard-earned EU export certification with it and the new owner of the premises will have to start from scratch and apply for certification. “Why do we still have to fight for our rights in an independent Namibia? We cannot be subjected to poverty in perpetuity. It is the duty of fellow Namibians that have acquired the wisdom to make positive changes to benefit the nation,” according to Witvlei Meat.
The company is currently asking the country’s highest court to overturn a High Court judgment in which Agribank obtained an eviction order against it in March this year. The three judges reserved their judgement after hearing oral arguments on the appeal and Agribank has since decided not to proceed with the eviction, but opted instead to enter into an interim arrangement while the parties await the decision of the Supreme Court.
By Deon Schlechter