Outgoing public enterprises minister Leon Jooste, whose term as Cabinet member ended yesterday, has issued a warning about the state of affairs at the country’s top beef company Meatco, saying it is in “huge trouble”.
However, yesterday he was quick to rule out a possibility that the meat processer and marketer could face liquidation, saying the institution is of strategic value.
“I will not lie to you, but Meatco is in huge trouble. Meatco is a very challenging, complicated institution. The company operates in a very complicated sector,” said Jooste in an exclusive interview with New Era, just hours before the Presidency announced his resignation from Cabinet.
“Meatco is unique. Remember, government doesn’t own Meatco. It is owned by producers. Meatco is an entirely different animal. There are challenges, but we have a very good idea of what is to be done to take the corporation forward.”
According to Jooste, Meatco occupies a strategic position in the livestock sector that will collapse if it is to disappear today.
“They deliver services to the public that the private sector cannot, but there are things that need to be addressed,” he added.
He said the Development Bank of Namibia (DBN) is now conducting a business model feasibility study, and will subsequently recommend a feasible business plan to Meatco.
“Meatco’s current business model is not viable, and for whatever reason, it has not been addressed in the past by various boards and managements. Meatco’s fixed cost structure at the moment is way too high,” he added.
“The company was designed to slaughter a number of cattle in a year, but what they did was that they never kept an eye on the throughput number, which has been declining over the years. Meatco never adapted its company business model, but Meatco can definitely work.”
Meanwhile, Meatco has repeatedly called on the government to review the country’s livestock exporting regulations, saying most regulations favour foreign companies.
Meatco’s executive for strategy and business development Isaac Nathinge late last year specifically bemoaned the 30% levy introduced by the ministry of finance in 2004 on the export of cattle weighing more than 450kg.
At the time, he said although this measure was meant to curb the exportation of animals, the measure has not been effective and has actually encouraged exports.
“We are concerned if you keep the situation as it is, where animals are just leaving and nobody is really taking accountability in terms of what type of animals are leaving. What is the weight of these animals? Can they be retained so that they can come through the value chain here in Namibia, rather than going out?” Nathinge asked.
“Can we put some additional measures to ensure that what really goes out of Namibia is not what we want? The 30% levy measure in its current form does not help the value chain. Actually, this measure is encouraging more farmers to just produce – as long as it’s below 450kg, sell it now so that it can go”, he stressed.
In 2019, Namibia exported about 12 400 metric tonnes of meat. Most meat is exported to the United States, Europe, South Africa and China.
According to the Namibia Statistics Agency, Namibia’s meat sector is a N$6.95 billion industry, with livestock farming amounting to N$5.23 billion and meat processing worth N$1.72 billion.
The Meat Board of Namibia reported that 69 811 cattle were marketed during quarter three of 2021, an increase of 2.30% from 68 239 cattle marketed during the same quarter in 2020.
The improved performance in the sector was driven by a significant increase in the number of cattle slaughtered by export-approved abattoirs that more than doubled their slaughtering during the quarter, while butchers and live exports reduced significantly.
ktjitemisa@nepc.com.na