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Home / Cashflow constraints a serious challenge for Meatco
Cashflow constraints a serious challenge for Meatco
2018-05-18Staff Report 2 Edgar Brandt WINDHOEK - A lack of working capital due to serious cashflow constraints and a sustainability concern are some of the challenges at the Meat Corporation of Namibia (Meatco). This, the corporations management said is due to declining cattle volumes and rising overhead costs. Meatco’s Executive for Stakeholder Relations and Corporate Affairs, Vehaka Tjimune, revealed these challenges to Minister of Agriculture, Water and Forestry, Alpheus !Naruseb on Wednesday during the minister’s familiarisation tour of Meatco’s facilities. Tjimune also noted that another challenge for the corporation is the underutilisation of its existing slaughter capacity due to decreasing volumes. Based on January 2018 audited figures, Meatco revenue amounted to N$1.4 billion, compared to N$1.6 billion the previous year, meaning that during the last financial year, the corporation made a loss of about N$43 million. The figures also indicate that during the previous financial year the corporation generated N$795 million in foreign sales, compared to N$1.2 billion in the preceding reporting period. Out of the total revenue generated, about 56 per cent was in foreign currency compared to 77 per cent the previous year. Tjimune pointed out that Meatco’s sales for 2017 were comprised of N$1.3 billion worth of meat sold in Europe, N$289 million sold in South Africa and N$179 million sold in Namibia. In terms of expenses, Meatco paid out more than 53 per cent to producers while over 40 per cent of the corporation’s production volume is sold within Namibia. It is estimated that Meatco, which employs 858 staff, currently holds 17 per cent of the Namibian cattle market. The corporation’s slaughtering capacity includes 560 cattle a day at its Windhoek plant and 25 cattle a day from the mobile slaughtering unit. According to Tjimune, pasture raised cattle comprise only 43.7 per cent of the corporation’s total throughput. In terms of production, Meatco’s tannery has the capacity to produce 980 hides a day while the cannery can put out 90 000 cans every day. Tjimune added that Meatco’s strategy for the Northern Communal Area (NCA) hinges on the mobile slaughtering unit that enables flexibility in bringing the abattoir to the farmers. “This means that livestock travel shorter distances which causes less stress and it creates capacity where needed,” said Tjimune. He added that besides a lower production cost, the mobile slaughtering unit improves food safety and hygiene standards, operates within areas which have not been closed off due to Foot and Mouth Disease and provides access to better quality cattle that are not slaughtered through the formal market. 2018-05-18Staff Report 2
