News Column

DBN Supports Struggling Meat Industry With N$200 Million

July 31, 2014



THE Development Bank of Namibia (DBN) has announced a N$200 million finance deal to meat producer, Meatco to help in the marketing of slaughter cattle.

The money is expected to have a positive impact on the Namibian meat industry following veterinary restrictions imposed by recently South Africa, the DBN said yesterday.

Since the new regulations were imposted on the import of weaners, the Namibian beef production sector is in a depressed condition.

The money will be used to fund, what Meatco calls 'Backwards Integration Strategy'. With this strategy the company aims to address current marketing and animal productions problems faced by the meat industry.

Meatco's strategy will focus on adding value to beef by purchasing weaners from local farmers and raising them to slaughter age cattle on feedlots.

126 400 WEANERS

Meatco said it intends to add value to 126 400 weaners. Instead of exporting live on the hoof, the cattle will be slaughtered and processed locally for export, the company said.

"The packaged cuts, which reduce the requirement to export live cattle, will also give Meatco greater capability to export beef to markets other than South Africa," the DBN said.

Meatco said N$150 million will be used to fund procurement from local farmers, and that N$50 million will be used to develop satellite feedlots at Gobabis and Otavi.

"An additional 538 direct employment opportunities will be created by Meatco as a result of finance," the DBN said.

DBN CEO, Martin Inkumbi said Namibia has a heritage of quality beef production and export of live cattle. But he said adding value locally, and processing cuts for export, would develop greater revenue streams for Namibia and stimulate production potential for local farmers.

BIG OPPORTUNITIES

Meatco spokesman, Mario Poolman said yesterday that the 'Backwards Integration', means is that instead of focusing on only procuring slaughter ox for the business, the company will be providing opportunities for farmers to sell their animals to Meatco earlier in the production cycle , when they are young or when they as weaners or stoors.

Meatco's Okapuka feedlot buys more than 25 000 weaners annually and raises them to slaughter ox

"We tested many of these approaches through pilots and the 'Backwards Integration' project has been in full swing since last year, with a target to locally add value to 126 400 weaners through these initiatives. The timescale to reach this target is five years, but with the restrictions imposed by the South African authorities for the export of weaners from Namibia to South Africa, demand for these products from Meatco has incresaed and we are seeing results that we only expected to see in the third year of roll out," he said.

Poolman said this is an opportunity for Namibia as a country to become more self reliant when it comes to adding value to weaners.

"That capacity needs to be created, but it will not happen overnight," he said.


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Source: AllAfrica


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