WINDHOEK – There is a need to identify and adopt a common industry vision for Namibia’s meat industry if the country is to obtain and retain a competitive advantage as a cattle/beef producer.
Meatco Chief Executive Officer (CEO), Vekuii Rukoro, siad at a Cattle Information Day recently. “We should learn to stand together and work together to achieve a competitive advantage for Namibia as a cattle/beef producer. And we should not throw away what we have already achieved. Our animal health status and traceability must be maintained, strengthened, respected and supported,” Rukoro informed close to 80 farmers. The aim of the Cattle Information Day was, amongst others, to bring farmers and stakeholders together to share information on issues relating to cattle production in the country. Rukoro was asked to address the gathering on ‘How Namibia as a cattle producer can maintain a competitive advantage’.
“I do not think we have a competitive advantage. I think we are in a position where we should look at how we can obtain a competitive advantage, instead of asking how we can maintain it,” he said. To go about obtaining a competitive advantage, Rukoro said the answer lies in the industry coming together and adopting a joint vision for beef production. “We should see Namibia as one actual beef producer, one value chain and a unit with sections. All stakeholders should have a single vision and support each other through the process, right from the farm to when the animal is finally marketed,” he said.
Rukoro pointed out that stakeholders within the industry still blame each other if something in the various sections of the cattle production chain goes wrong, instead of supporting one another. Vertical integration is needed to extend Namibia’s competitive advantage. “In Meatco’s case vertical integration means that the producer should own the cattle value chain up until the point where it reaches store shelves. This means they should own the farm, the production system, the abattoirs and the marketing channels. Through this, the chain will become more cost effective, because there will be less middle-men involved. At the end, more value will find its way back to the producer’s pocket. This is also what we argue with our approach to the Meatco ownership,” he said.
Looking at Namibia as a single production chain also means looking at how to make it more effective, Rukoro said. “Meatco – as an abattoir section in the chain – tries to manage costs efficiently. We adjusted our factory capacities to accommodate the burden of overcapacity and are always looking at ways on how to do business more cost effectively.”
But is the farming section of the chain doing the same? According to Rukoro, the lifestyles of some cattle producers have overtaken their income levels. They then blame their situation on other links in the chain. “We should ask ourselves a few honest questions. For example, is it necessary to farm with a Land Cruiser if you can’t afford to maintain your camps on the farm? Is it perhaps that we’ve never thought of doing things differently?” he asked.
He added that cost efficiency is not only a problem on farms. Somewhere in the Namibian cattle value chain, money was being lost because of buying and selling the same animals over and over, he said. “At the end of the day, with all the commission, transport and Meat Board levies, an animal that was supposed to cost N$3500 to produce costs closer to N$10 000. It completely swallows up the value which is supposed to go to the Namibian producer. In a joint chain, with one vision for Namibia’s cattle production, we can unlock this lost value for producers,” Vekuii said.
“With one vision and one plan of action, we will realise more value out of the whole chain, and at the end of the day, the producer will be the winner,” he said.