By Deon Schlechter
WINDHOEK – Exactly one year after he became the new Chief Executive Officer (CEO) of Meatco, Vekuii Rukoro has noted with great concern a confrontational relationship between Meatco and some producers and some people in the industry clinging to traditional views who like the way things were done in the past.
“Those days are numbered. We are here to perform our mission as partners of farmers and to do it in harmony with them. Times have changed. What worked 20 years ago, 15 years ago or even five years back, doesn’t work anymore. To remain competitive, we need to act fast, deliver on time and be comprehensive in the new business environment,” he is quoted in Meatco’s latest E-news Newsletter. Rukoro says Meatco’s biggest challenge is the policy environment in which they operate. “If it is more conducive, we would be able to accomplish much more at a quicker rate. The strange thing is that what we do, is consistent with what policymakers want to achieve, especially when you consider the value that we as a Namibian organisation add to a renewable source to bring international currency into the country. That money we pay in taxes, on salaries for more than 1 000 employees and we pay the rest to the country’s beef producers,” he says.
Since Rukoro stepped in, Meatco’s business has been realigned from top to bottom, with tighter control over the beef supply chain, and a policy has been adopted to turn around or appropriately scale down business units that do not add value to the company. “In addition, the South African border re-opened for beef imports, the government decided on a more equitable way to allocate the Norwegian quota with Meatco getting 75% thereof. The latter allowed us to increase producer prices at the beginning of the year with N$4.65 and to keep it high over the last few months, regardless of the downward trend in the South African market. The result is that the number of cattle that are currently delivered to Meatco is higher than we budgeted for, which is a good position to be in.”
“ After a year I am more convinced that there are almost infinite possibilities for Meatco as a business to be more relevant. We began with permit days in communal areas and are now going door to door in remote settlements to buy significant numbers of cattle. We are looking at nutrition feeding initiatives to get involved in a larger part of the Namibian beef supply chain, we are working on brand new local value-adding initiatives and we are also strengthening our position in international markets in a variety of ways.”
Rukoro adds that everything that Meatco does, and all the profit it makes, finds its way back into the farmers’ pockets – whether in the form of producer price or a back-payment. Meatco does not only compete locally competition but as an exporter of premium products competes with the best and strongest in their category in the world. A cornerstone of international competitors in its industry is how integrated the value chain is from the farm to the consumer. Whole value chains normally belong to a few large businesses. These businesses train professional farmers to farm on their land and supply what the business needs. They do not have a problem with cattle numbers nor the delivery of huge tonnages of beef to world markets. Their capacity is used consistently and optimally, and they can supply the market with regular quality on a predictable basis. They work with millions of cattle a year, while we struggle to get to 100 000.
“ To compete in this environment, we need to be progressive and commercially operated. We need to embrace new technologies and approaches. The challenges are enormous, and we have to be smart to survive and compete in an international context,” says he.Meatco’s new approach to procurement, to move back in the value chain and thereby gain more control over the supply of cattle to our business, is consistent with these principles. The difference between them and the big businesses in Brazil and Uruguay is that they take their business forward along with the producers, instead of cutting producers out of the chain.
Referring to Meatco’s new Meatco Owned Cattle (MOC) initiative, Rukoro says it serves as how the principle of a partnership works with each doing what he/she does well, and giving one other the space to do so, to add value and to perform well together. “In the process we are creating another marketing channel for weaners, because these projects source animals from other local farmers. These animals would otherwise be exported to South Africa on the hoof. This way we keep animals in the country and we add value locally, while ensuring our hooks in the factories are full, which in turn means that producers get better prices because our factory being utilized optimally. The income we generate on each additional animal we slaughter and sell goes back to the farmers,” Rukoro says.
He stresses that Meatco wants to be the dominant player in the market. “What I want to leave behind one day, is a company that is sustainably profitable. I want Meatco at the centre of the meat industry – so that anything in Namibia that has to do with meat must go through Meatco, and to use this dominant position to the best advantage of Namibian livestock producers. This means a business without individual shareholders and a Meatco that is restructured to maximise its commercial success and benefits to the Namibian livestock producers. I want to leave a company that is technologically at the forefront, so that new opportunities locally and internationally can be quickly and fully utilised, so we are competitive now and in the future. My goal is therefore to align the welfare of the farmers, the employees and the government with each other – so that if Meatco does well, they do well,” he concludes.