• May 24th, 2019
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World’s largest feedlot enters Namibian market

Deon Schlechter

WINDHOEK - Karan Beef South Africa, which operates the largest cattle abattoir on the continent, has entered the Namibian weaner procurement market in what could be a game-changer with huge benefits for local producers.
Namibian weaner exports to South Africa decreased from 219,000 in 2017 to 210,000 exports in 2018 and Karan Beef is committed to make full use of the Namibian weaner situation. 

According to Trading Economics, South Africa realised a positive trading balance of R30 billion a year with Namibia for the period 2015 to 2017.  Confirming the company’s direct involvement in the procurement of weaners, Justin Karan, a director of Karan Beef told this reporter in an exclusive telephonic interview from Johannesburg that the company has been welcomed with open arms by both the Namibian government and all role players in the industry.

Karan Beef has already started buying Namibian cattle via agents, the auctioneering system and also privately from farmers. 

Karan Beef processes 2,040 head of cattle daily and debones up to 300 tonnes of meat a day and South Africa is its biggest market, with significant exports to UAE, Kuwait, Qatar, Bahrain, Oman, Jordan, Egypt, Mauritius, Seychelles, Maldives, China and Hong Kong. 

Local social media lit up with excitement about the venture, with producers stressing the massive cost savings of preparing animals and transporting them to SA. Karan confirmed this, saying Karan Beef pays very competitive prices and puts money in the pockets of Namibian farmers who are trying to rebuild stocks after devastating droughts and the possibility of another dry season. 

Karan says the company is engaged in ongoing talks with both government and Meatco about exciting developments for the future refuting claims that Karan Beef is looking at the possibility of establishing a feedlot near Otjiwarongo because fodder growing in the unpredictable Namibian climate is too risky. 

“But we have already established various holding stations on farms in Namibia where we prepare and condition weaners between 14 and 20 days to be exported to SA. We do a lot of the unthankful work for producers, save them money and still pay them a decent price because we have the infrastructure to operate on a rather massive scale,” he notes.
“We are extremely proud to be part of this ground-breaking venture into Namibia and looking forward to working closely with the government and all role players in the industry to the benefit of Namibian producers,” he says.
The firm owns a herd of about 160,000 and has also purchased adjoining farms, and own an abattoir and a nearby distribution centre. Namibia exports on average close to 200 000 weaners annually. 

Titus Koen, procurement officer at Agra says the main reasons why weaner prices have risen sharply are due to a shortage of cattle in South Africa due to recent droughts, as well as the lower maize price, which holds a significant cost benefit for feedlots. “The other reason is that South Africa, previously a net importer of meat, has now become a net exporter of meat after the country successfully marketed its meat overseas. The largest part of Namibian weaners are currently being exported to South African feedlots,” says Koen.

South Africa is Namibia’s main trading partner in livestock, meat and meat products due to the two countries’ economic integration and geographic location. The bulk of Namibia’s imports come from South Africa, and Namibia exports most of its products to South Africa. Despite this interdependence, both countries are protected by policies within their own economies.

Namibia is a net exporter of cattle, sheep and goats, and a net importer of grain, feed, sugar, dairy, poultry, pork, fruit and vegetables.

South Africa, on the other hand, is a net importer of beef and lamb, and a net exporter of maize, which means that South African farmers can feed their cattle more cheaply than their Namibian counterparts, giving them a competitive edge.
Feedlots in Namibia are not financially viable, as beef is sold at export parity prices, while animal feed is transported from other African countries. 

According to statistics compiled by the Meat Board of Namibia, more than 12 000 tonnes of beef, mutton, pork and processed meat products were imported annually for the period 2015 to 2017, while more than 12 000 tonnes of chicken (35 percent of total Namibian consumption) were imported annually.

Namibia has negotiated export market opportunities for beef to some of the most lucrative markets in the world, including the EU and Norway. However, the volume of beef exported to the rest of the world is still far less than what is exported as live animals or beef and mutton to South Africa.

It is clear that Namibia relies on available market opportunities in South Africa
for its export products. The production potential of the Namibian livestock sector is not expected to grow much in the future, and the contribution of Namibian exports of livestock and meat will remain less than 10% of total meat consumption in South Africa.
The two countries have different comparative advantages, and these should be used to enhance trade and economic development in both Namibia and South Africa. Similarly, certain industries need to be protected to sustain existing job levels and create new employment opportunities.

Staff Reporter
2018-12-18 09:01:56 5 months ago

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