WINDHOEK – The scrambling between Meatco and Witvlei Meat over the 50:50 formula for beef exports in 2014 to Norway took a whole new turn over the weekend when a newcomer to the beef export business, Brukarros Meat Processors (BMP), also applied for an export quota.
The latest development in the battle for a piece of the lucrative Norwegian market could spur another round of intense and heated discussions when a panel of analysts will hear final submissions from all three applicants during a special consultation on November 18 involving the Meat Board, which administers the quota.
It will also mean the 50:50 formula, initially approved by Cabinet in 2010, will have to be revised before the quota allocations are announced for the 2014 beef exports.
Confirming his application for a quota, manager of BMP, Salomon Nemaire, said his company obtained full access to the EU market on January 26, 2009, and has since been exporting some 200 tonnes of prime lamb and venison.
The stakeholders of BMP are a consortium of individuals and Namibian companies and officially opened its doors in January 2008.The plant has an official slaughter capacity of 1 500 sheep per day with a deboning operational capacity of 300 carcasses per day.
The majority of sheep and lamb carcasses are, however, marketed to South Africa. BMP’s plant is located on a farm 20km outside Keetmanshoop.
While the largest beef exporting company, Meatco, and the small independent meat processing company Witvlei Meat have been involved in a sometimes bitter battle over the 50:50 formula, Nemaire says the time is ripe for BMP to enter the beef export market.
“We possess the facilities, we have proven ourselves with our quality of lamb meat, and we are more than geared to tackle the beef export market. We have submitted our application to the Meat Board, and now the final formula must be decided by the Meat Board.” Without disclosing the percentage BMP has applied for, Nemaire said it will initially be “just a small portion of the quota”.
Last year Meatco exported only three percent of its total production to Norway while for Witvlei Meat it equalled 73% of total production.
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 also wants a review of the 50-50 sharing formula for the 2014 quota allocation on grounds of the volumes it slaughters, saying it cannot share the export quota equally with Witvlei.
The meeting scheduled for November 18 follows after the parties involved could not reach any binding agreement on a similar consultative meeting on October 30, headed by two experts in the field of cost effectiveness of the European market, Roelie Venter and Andre Mouton.
Meatco further stresses the current equal allocation is grossly discriminatory against the close to 100 per cent of Namibian producers who market their cattle through Meatco, and is therefore, morally and legally indefensible.
In 2012, Meatco’s two export licensed abattoirs produced 104 524 tonnes of beef of which it could only export 675 tonnes to Norway under the 1 350-tonne quota allocated to Namibia. This translates to about 3 per cent of its total production.
This, according to a 2011 submission of Meatco to the Permanent Secretary of Trade and Industry led to the company’s revenue decreasing by approximately N$35 million during the 2011/2012 financial year.
Badenhorst also shot down allegations the current allocation results in an unfair advantage to an individual business and its shareholders that have led to producers receiving lower prices while enriching foreigners.
Witvlei Meat has welcomed the third entrant and requested that their application (provided it’s a small volume) be granted and the balance be divided 50:50 between Meatco and Witvlei Meat.
Witvlei Meat is currently asking the country’s highest court to overturn a High Court judgement in which Agribank obtained an eviction order against Witvlei Meat in March this year. The three judges reserved their judgement after hearing oral arguments on the appeal and Agribank has since decide not to proceed with the eviction of the abattoir but decided to enter into an interim arrangement while the parties await the decision of the Supreme Court.
By Deon Schlechter