Long-term debt for ailing State-owned meat-processing and meat-marketing entity Meat Corporation of Namibia (Meatco) consists of three loans from the Development Bank of Namibia (DBN). The first loan has an outstanding balance of N$151 million, the second has an outstanding balance of N$306 million, and the third has an outstanding balance of N$213 million.
In its 2022/23 annual report, covering its financial period from 1 February 2022 to 31 January 2023, the corporation noted a government-issued guarantee to DBN for Meatco to obtain funding, amounting to N$200 million.
“DBN disbursed the amount to Meatco at the end of July 2022. The finance ministry secured N$200 million in the next medium-term expenditure framework (MTEF) as a government grant. Government will repay the N$200 million to DBN on behalf of Meatco. The repayments will be made semi-annually through budgetary provisions, commencing on 31 July 2023 and every sixth month thereafter, while Meatco will be responsible for the interest,” the report stipulated.
Government’s financial support to Meatco is for the corporation to continue delivering on its mandate. This is while government works on a sustainable model to revive Meatco’s prospects in the long term.
For the period under review, Meatco increased its revenue by 15% and gross profit by a massive 950%, taking into consideration a low starting base.
These results were achieved despite slaughtering fewer cattle and a declining Euro/Namibia Dollar exchange rate.
During the 2022/23 financial year, Meatco paid N$560 million to producers to protect primary livestock production in the national interest. Paying sustainable market-related prices consistently, Meatco stated, would allow producers to better plan their production and diversify between weaner and slaughter ox production.
The corporation further generated N$865 million in revenue compared to N$752 million in 2021/22, and incurred a loss before tax of N$118 million, compared to N$206 million in 2021/22.
Meatco CEO Mwilima Mushokabanji said market development is critical to ensure maximum realisation from various markets.
To date, Meatco successfully exported its first beef consignments to new markets, namely China in 2019 and the USA in 2020. Critical to Meatco, Mushokabanji said, was to ensure mainstreaming the Northern Communal Area (NCA) as part of living up to the mandate of serving all producers and creating wealth for all Namibians.
Mushokabanji in the report also noted that Meatco is in final discussions to open the Middle East market to begin exporting NCA beef into this market. Meatco made these milestones possible as part of a relentless drive to pursue an inclusive agenda to service all producers, regardless of where they find themselves in the country.
Furthermore, a report dated 22 March 2023 by Ombu Capital, a firm owned by former Standard Bank Namibia CEO Vetumbuavi Mungunda, observed that Meatco can once again become a key player in the Namibian beef industry if it is structured to support the consolidation of the industry, and where it pays and achieves the best possible prices to the benefit stakeholders.
“A recommendation is made here to implement a process of helping to unify the sector, and bring about cohesion through Meatco.
This will help the country to consolidate the shrinking throughput at a national level, as well as help lessen the fragmentation in the sector… Such a model should help to introduce new technical expertise, management and leadership experiences as well as new routes to market for Meatco that strengthen its competitiveness and ensure its commercial sustainability,” Mungunda advised.