2006-01-16Staff Report 2 "By Kuvee Kangueehi Windhoek The Ondangwa-based Northern Tannery, which was established at a cost of N$42 million has become a white elephant and needs capital injection from the Namibian government to become sustainable. The general manager of the Northern Tannery Alfred Andreas told New Era yesterday that the company is not operating at full capacity, adding that unless farmers in the north change their practices from subsistence to semi-commercial farming, turning the tannery into a sustainable and profitable venture will remain a pipe dream. The tannery, which operates under EPZ status, was financed by the Namibian government, which guaranteed a soft loan of N$42 million from the Government of the People's Republic of China. The money covered the cost of construction, the purchase of machinery and payment for technical services. When the company officially opened in April 2002, it was envisaged that the tannery would earn N$5 million per month in the first six months of operation and then N$11 million per month a year after. This dream was to be achieved if the tannery could process a total of 120 000 hides per year. However, currently according to Andreas, the tannery is only processing 8 000 to 15 000 hides per year. ""We need hides and we simply cannot find them anywhere."" Andreas said although there are approximately 2 million cattle above the red line, few of these animals are slaughtered. Most of the farmers do not produce the animals to sell, as they are not commercial farmers. ""Most of the farmers use the animals to plough and we only get a few hides during the festive season when people are having their traditional weddings."" Andreas noted that tanneries usually get most of their hides from the abattoirs and currently, there are no major abattoirs to supply them with the materials. Andreas said apart from the lack of hides, the tannery has to deal with low quality hides because most animal owners in the north do not keep hides well. In addition, Namibia has a lot of bushes. ""The thorns, horns and parasites on the cattle destroy the hide, which affects the quality of the hides negatively."" The general manager added that other factors affecting the company are local transport, cost of chemicals as well as transport of the hides for export, which is very expensive. Andreas does not expect a change in the fortunes of the ailing company, as Meatco which has the biggest abattoirs have their own tannery, namely Okapuka Tannery. He said that the Northern Tannery approached Meatco to buy its Oshakati hides but could not meet Meatco's prices. The Oshakati and Katima Mulilo abattoirs slaughter on average 15 000 per year but the slaughtering has declined to 5 800 for 2004. Meanwhile, the tannery manager at Okapuka Tannery George Kotze told New Era that there is simply a shortage of hides in the country and his company has to import hides from neighbouring countries such as South Africa and Botswana to remain sustainable. ""Okapuka Tannery imports hides from South Africa, Botswana and even Australia ... to reach the tannery's capacity."" Kotze said slaughtering of cattle declined over the past years, which led to the closing of the Otavi abattoir. He added that the tannery needs 200 000 hides to break even with cost, while 240 000 per year is the capacity of the tannery. The two main abattoirs in the country, the Meatco Windhoek and Okahandja Abattoir only supply 140 000 hides to the Okapuka Tannery. The tannery manager added that the import of hides from South Africa and Botswana is not only meant to increase the number of hides but also to improve the quality of products. The Okapuka Tannery exports wet blue hides with about 95 percent to Italy. He added that the tannery was planned, built and equipped to process hides into final product, leather, but unfortunately the Italian and world fashion houses change the garment almost every year, and now they only processes up to wet blue. Tanneries in Namibia consist of the Northern Tannery, the Okapuka Tannery, Witvlei Tannery, which was stillborn, and Ostrich Production Namibia's tannery near Keetmanshoop in the south." 2006-01-16Staff Report 2
