Namibian meat producers raise US$9.8m to fund establishment of beef processing facility

NAMIBIA – Beef Value Chain Forum (BVCF), a consortium formed by Namibian beef producers, has so far raised N$146 million (US$9.8m) to be channelled towards establishment of a new beef processing facility targeting the export market, 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.

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.

According to Meat Board of Namibia, in the first five months of 2021, the Southern Africa country exported 45 623 live animals, while local slaughtering stood at 29 379 head of cattle for both export and local consumption during the period under review.

In the entire 2021, only 25 percent of all cattle marketed were slaughtered at export abattoirs.

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.

The parastatal, according to reports by The Namibian has been experiencing power struggle among dissatisfied producers.

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.

To make this a reality BVCF requires a total of N$200 million (US$13.4m), having already raised 70% of the equity target from 549 producers.

The first round of funding for the new export abattoir lasted from 24 April to 24 June 2022, during which Cirrus Capital, the corporate/transaction advisers, travelled throughout the country with members of the BVCF task team to present the project’s investment strategy and business plan to Namibia’s beef producers.

The targeted amount then was N$100 million (US$6.7m) from Namibian beef producers, but that was surpassed.

“With the private placement for Savanna Beef Processors Ltd, we embarked on a unique challenge to capitalise a newly incorporated public company and invite only beef producers to participate,” said Romé Mostert from Cirrus Capital.

The company’s board Chairman, Mecki Schneider highlighted that the capital raising showed that there was a need and desire to improve the profitability of cattle farming.

“Most of us were overwhelmed by the support that far exceeded our initial target of N$100 million (US$6.7m). With this producer driven initiative we should take control of our product for the benefit of the producer.

“This initiative will further enhance the “Growth at Home” concept, with additional foreign currency earnings, further job creation and initiative to reverse the declining rural Namibian economy,” he said.

There could be another round of funding in the second half of 2022 to fund the remaining N$54 million (US$3.6m).

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