The country’s meat processor, Meatco, has expressed discontent with the way the Meat Board of Namibia articulated its concerns with its wellbeing, saying the regulator is sowing doubts among the corporation’s local and international stakeholders.
In a strongly worded letter this week, Meatco interim board chairperson Adolf Muremi expressed dissatisfaction while responding to Meat Board of Namibia (MBN) chairperson Patricia Gurubes. This is after Gurubes wrote a letter to agriculture minister Calle Schlettwein where she raised concerns over the future performance of Meatco, asking for the
In a letter to Schlettwein, Gurubes raised serious concerns over the involvement of Meatco north of the veterinary cordon fence (VCF), saying the existing excess slaughter capacity and the persistent lack of slaughtering cattle offering cast doubt on the long-term viability on any local and export abattoirs north of the VCF.
She also said she was concerned over the recent retrenchment of staff members above 55 years of age, a recent exercise undertook by the meat processing company in April 2021 to ensure the corporation remains competitive, sustainable and profitable.
“Retrenchment as such and subject to reason is a normal business practice. The MBN has reason to believe that proper due diligence as well as governance procedures were not followed during the applicable retrenchment process as certain staff members above 55 years are being re-employed,” Gurubes said.
Another issue she complained of is the recent resignation of three board members, saying such resignations are highly irregular.
Former board chairman Johnnie Hamman and fellow board members Kay Dieter Rumpf and vice chairperson Clara Bohitile resigned in May.
Also, she claims Meatco has been withholding the 2019/2020 annual report in a bid to hide the loss of approximately N$115 million, as well as a formal qualification as doubt to it being a going concern by the auditors.
Responding to this, Muremi said the company’s business model for the Northern Communal Area (NCA) is aligned to the strategy that is operationalised to transform and mainstream the livestock and livestock products value chain for the NCA in the Namibian economy.
“The beef products originating from the NCA have access to the market south of the VCF and markets in Africa through the African Continental Free Trade Area Agreement (AfCFTA) as well as potential markets in the Middle East and South East Asia that accept beef processed through a Commodity Based Trade protocol,” he said.
On the retrenchment of employees, Muremi said the practice was not new to Meatco as similar exercises were carried out between 2016 and 2018.
“Meatco retrenched 390 employees following the withdrawal of Meatco from operating Katima Mulilo and Oshakati abattoirs (194 employees) due to operational losses and the closure of Okahandja abattoir and the under-capacity utilisation of the Windhoek abattoir (196 employees),” he explained.
He said the retrenchment of employees was necessitated by the declining national cattle herd in the area south of the VCF compounded by rising slaughter prices, drought and a spike in the exportation of live animals to South Africa due to rising predatory prices that influenced the change in Namibia’s cattle production system from oxen to small weaners and weaners.
“The retrenchment of 81 staff members who are 55 years and above was approved by the board of directors and processed in line with the Labour Act. Actually, three of the retrenched staff members have taken Meatco to court, hence the matter is sub-judice and I advise that the MBN should allow the due process of the law to take its course,” he added.
On the resignation of the three board members, Muremi said, to date, there is no specific reasons provided by them, therefore, such resignations have not been proffered to the Meatco board.
“As such, there has been speculation in the media about Meatco on governance issues and its ability to continue operating as a going concern. Actually, honourable Leon Jooste (public enterprises minister) has appointed me as interim chairperson, and there has not been a further resignation of any of the current board members,” he said.
Muremi said the corporation is stable and operating under normal circumstances.
He said as a going concern, throughput remains one of the company’s biggest challenges, especially after the devastating drought in 2019 during which Meatco slaughtered 116 304 cattle.
According to him, 2020 has equally been a difficult year where Meatco experienced financial constraints that have been compounded by the restocking of core herds by the producers, including the Covid-19 outbreak, which negatively influenced the demand for Meatco’s premium products and market realisation.
As such, he said, Meatco only slaughtered 36 074 cattle by the end of the 2020/21 financial year, which resulted in a loss of N$118 million.
“The reality is that Meatco needs good quality 70 000 slaughter cattle annually to break even. The shortage of slaughter cattle in Namibia have forced Meatco to import slaughter cattle from Botswana to address the challenge of throughput,” said Muremi.
The meat board is mandated to promote a conducive environment for sustainable livestock production and works to maintain standards and quality assurance.