NAMIBIA – Beef Value Chain Forum (BVCF), a consortium formed by Namibian beef producers, has raised an additional N$27.56 million (US$1.85m) to invest in a new beef export processing facility, known as Savanna Beef Processors Limited.
The BVCF was officially inaugurated in 2021 with a growing membership base of over 500 members, with the aim to increase the profitability of cattle producers by creating a world-class brand through local value addition.
This the consortium has highlighted will be achieved through the construction of a state-of-the-art abattoir and processing facility, to tap into the world beef market.
It is envisaged that the new facility will have the capacity to retain an additional 50 000 weaners for slaughter cattle production through a positive weaner to slaughter-cattle price ratio.
The second funding round has brough the total equity raised to N$173 million (US$11.62m), bringing it closer to its targeted N$200 million (US$13.4m) equity.
The consortium undertook its first funding round from April – Jume, raising N$146 million (US$9.8m) from 549 producers.
The second round of funding which kicked off on 19 August and ran until 9 September, saw participation by 165 producers of which 54 were from existing shareholders, and 111 from local beef producers who did not participate in the first round.
According to the company, the subscription rate for the overall offer currently stands at 86.8% of the target of N$200 million.
Just like the initial funding round, the second fundraising was spearheaded by Cirrus Capital and corporate advisers, and the success registered to date has been attributed to widespread producer support to the consortium, with presently more than 600 paid-up members.
“Cirrus Capital travelled around the country with members of the BVCF task team to promote the project’s investment strategy and business plan to beef producers, following their successful roadshows during the first round.
“The overwhelming producer support saw Savanna raising in excess of 80% of its equity need from producers, completely surpassing our greatest expectations.
“The N$173.568 million (US$11.65m) raised has turned an idea into a reality, ever increasing the prospects of Savanna,” Romé Mostert from Cirrus Capital said.
The organization plans to secure the remaining N$26.432 million (US$1.7m) in equity from institutional investors and to raise the debt-portion needed for the project tagged at N$300 million (US$20.15m).
Namibia is the leading producer and exporter of beef in Africa; however, the country has in the recent past exported more live animals as compared to value added meat.
Currently, Meatco is the biggest exporter of beef in the country, and it appears plans are fast advancing to unseat the state-owned entity from its prestigious position.