NAMIBIA – Meatco has warned against plans for the Chinese to erect an export abattoir in the Tsumeb and Otavi area, saying Chinese value addition to Namibian cattle will create overcapacity in the slaughter space and compete with producers who would by then have shareholding in Meatco, of whom 60 to 70 percent are communal farmers.

“This is an example of a divergent vision for the industry, and the type of decision-making that can tear apart our sector. We should all be asking questions about such ventures if we are to ensure the long-term sustainability of our way of life as farmers,” said Meatco Chief Executive Officer Adv. Vekuii Rukoro during the annual Producer of the Year Gala Awards ceremony on Friday night in Windhoek.

Rukoro said Meatco has no intention of buying and owning its own farms as it does not intend to become a cattle producer itself.

“Producers will continue to be our sole source of raw material supply for both factories and feedlots. We are not here to eat your lunch, we are here to ensure that you have lunch to eat tomorrow,” he said.

Rukoro said there are still many improvements to be made in the Namibian beef value chain, and that Meatco’s backwards integration initiative was just the start of bigger things to come.

“Diversity is our strength but we need to work together. A coordinated and integrated value chain will unlock enormous value for producers, especially one geared towards the world’s most profitable markets.

“Fundamentally, we have the same interest: to use the land to produce food and to prosper. Let weaner farmers produce weaners and oxen farmers oxen as efficiently as possible and if they produce slaughter cattle let them produce it for the markets that pay the best prices in the world.

“That is what Meatco’s backward integration is about: to effectively extend our hand to producers to add value to their animals on their own farms.

This was evident when the South African authorities suddenly closed their borders for Namibian weaners this year and our weaner prices barely dropped. This was because Meatco was able to help producers add value to weaners and effectively link the export market to weaner producer prices.

Had this not happened, weaner prices would have dropped significantly and the crisis would have been a catastrophe for Namibian farmers.”

He said Meatco is not re-inventing the wheel, but re-inventing the way the wheel turns.

“In big economies where millions of cattle are produced annually, like Brazil, corporations like Meatco own farms with closely integrated systems. It is highly cost effective and highly profitable but the producers have been reduced to mere farm workers and no longer landowners.

“In our case, producers remain on their land as the primary producers and take 100 percent of the profit. We are effectively building a strong, world-class company for producers to inherit when the ownership issue is eventually resolved,” he stressed.

October 28, 2014;