Despite painting a bleak picture of the struggling Meat Corporation of Namibia (Meatco), agriculture minister Calle Schlettwein now says the entity is not his baby, instead referring queries pertaining to it to the finance ministry, under which the corporation resides.
This follows Schlettwein’s recent meeting with representatives of Savanna Beef Processors, which some industry stakeholders see as direct competition for Meatco.
Senior officials in the agriculture ministry also attended the closed-door meeting.
A shocked Schlettwein initially refused to provide details of the meeting when approached by this journalist at State House last week, instead requesting that questions be sent to his communications team.
New Era’s questions to the minister centred around the purpose of the engagement, his views on Savanna Beef Processors, and what he has done to propel Meatco out of the red, apart from bashing the cash-strapped parastatal.
“[The] Meat Corporation of Namibia is a public entity that is resorting under the Ministry of Finance and Public Enterprises. Please do reach out to them for anything related to Meatco.
The same goes for Savanna Beef Processors, which is a private entity on its own. Any matters related to them, please do reach out to them,” Schlettwein said, seemingly dodging questions relating to his ministry’s role as a key stakeholder.
Until the establishment of the now-defunct public enterprises ministry, Meatco resorted under the agriculture ministry.
That relationship is said to remain symbiotic.
Critics also say since Meatco became a parastatal, it has jumped from spring chicken to the Intensive Care Unit.
Schlettwein seemingly echoed these sentiments when he proverbially stated that the Government must decide to terminate Meatco’s life support system, or breathe new life into its ailing operations.
“I am in no position to entertain any further questions regarding this subject matter,” he said over the weekend.
Last week, Schlettwein – who hardly minces his words – said despite paying off commercial bank loans, Meatco’s financial situation remains precarious as the entity simply borrowed N$437.3 million from the Development Bank of Namibia to pay off its mounting loans.
“I am very disappointed with the racial slant the discussion about Meatco’s fortunes has taken. It should remain a discussion about how the public interest in a public entity can be best resolved,” he recently vented.
He went on to say: “The Development Bank of Namibia recently published its 2021/22 annual report, ending at 31 March. Meatco loans [with DBN] stood at N$437.3 million. [The] debts to commercial banks were paid off with a loan from DBN. Zero improvement. That is the point”. He added: “No improvement in the precarious financial situation of a commercial entity, which is pivotal in the Namibian livestock sector, is for sure worrying.”
No beef
The arrival of Savanna Beef Processors two years ago – a conglomerate of private beef producers – is seen by certain quarters as a direct threat to Meatco’s existence.
Its proponents, however, opine that healthy competition is necessary to avoid a monopoly, which Meatco currently enjoys.
Commenting yesterday, Savanna Beef Processors’ chairperson Mecki Schneider said they had nothing to do with Meatco’s fall from grace.
He also dismissed claims that Savanna Beef’s core objective is to push Meatco out of business.
According to him, Savanna Beef was conceptualised decades ago. This chiefly emanated from amendments to the Meatco Act in 2001. In addition, it is alleged that various proposals on how Meatco should be run by producers and farmers unions, which were swept under the rug, as well as various ministerial directives, detonated Savanna Beef’s establishment.
“We are not a splinter group whatsoever. This is a process that has taken over a decade [to start]… We haven’t slaughtered a single head of cattle yet [not at least until October 2024]. So, how are we competition? I personally slaughter my own cattle at Meatco at the moment,” Schneider said.
He added that it is crucial to keep Meatco alive.
“But if it’s not financially viable, then producers have to ask the question ‘what is the alternative?’… Producers are concerned, ‘will they ever get their money?’ This is why Savanna Beef is an option for producers. The support we have received emphasises that there is a need out there to have other abattoirs slaughtering for the export market, and not a monopoly. We are not responsible for anything that has happened to Meatco’s finances,” the farmer reiterated.
In the eyes of Savanna Beef, the real competition lies in the exportation of live weaners to South Africa.
“Meatco’s real competition is BeefCo, the other exporting company in private hands; a private family. They have slaughtered more cattle than Meatco. So, how can you argue that we are competition when we have not slaughtered anything yet? And we will not slaughter anything until October next year. So, that argument is discarded. It’s propagandism,” Schneider charged.
Fragmented
More so, Savanna Beef’s head honcho noted that if there was cooperation in the beef industry, it would have served their collective interests.
But this is not the case.
“If we could get cooperation in the industry and not be fragmented as we are at the moment, [we could do better as an industry]. It doesn’t make sense to put up a new facility for half-a-billion Namibian dollars if there is an empty [government-owned] abattoir standing in Okahandja,” he reasoned.
He said Savanna Beef’s attempts to rent the dormant facility from the government were met with staunch resistance.
The beginning
On 17 November 2017, concerned farmers converged in Otjiwarongo to discuss Namibia’s beef value chain.
They agreed there was a problem, as they felt livestock producers for the slaughterer market were under siege from those who were exporting live weaners to the South African market.
“That is our real competition. If we can add value to our product here, retain it and export it to the outside world, especially to the high-pricing European market, [especially to] Norway, which is the best market in the world at the moment… we were concerned that we could lose that market, which is of detriment to Namibia,” he said.
He added: “We embarked on this project to retain 50 000 more weaners, which we think we can do if we can pay a better price. You will only change this phenomenon of leaning towards weaner production if we engage with market forces with a better price. We are convinced we can do it.”
This, he said, will add value, create jobs and is in line with the growth-at-home concept.
“That money will flow into the pockets of producers in the rural areas and villages of Namibia,” he explained.
Progress
Savanna Beef Processors was formed to develop and invest in a new beef export-processing facility in Namibia.
This process is expected to cost the private entity around N$500 million. The amount is expected to cover both working and assets capital.
The financing aspect of the project should be completed by March this year.
Savanna Beef wants to build a state-of-the-art abattoir designed by three international companies, but to be constructed by local contractors, some 35 kilometres south of Okahandja.
“We want to make sure that it is state-of-the-art, with the latest designs, to have an efficient flow of our product,” he said, without revealing the names of companies involved.
Savanna Beef expects to kick off with full- scale operations in the final quarter of 2024, New Era understands.
Schneider also described their caucus with the minister as fruitful.
“We had a meeting; a very positive meeting. We are grateful that despite the short notice, we were able to meet the minister with his senior management team, together with the deputy minister and some directors,” Schneider confirmed, albeit with skepticism.
The meeting
The assembly with Schlettwein, he said, was necessitated by a myriad of issues concerning the beef industry, including the state of affairs at Meatco.
“We just wanted to get clarity and seek cooperation with the ministry. This is one of our fundamental approaches since the beginning, that we seek cooperation with all stakeholders in the meat industry,” Schneider revealed.
During the meeting, Savanna Beef also presented their business case to the ministerial delegation “on where we come from and what we have achieved.”
– emumbuu@nepc.com.na