Keetmanshoop — THE Namibian table grape industry is one of the most exciting projects being undertaken in the Namibian economy today, said the Managing Director of Aussenkehr Farms, Dusan Vasiljevic.

Vasiljevic told the Karas Investors Conference which concluded last week here that the industry, based in the Karas Region, comprises 1400 hectares of vineyards of close to N$600 million in investment and is spread over three areas - Aussenkehr, Noordoewer and Komsberg.

"Currently, the industry produces over two million cartons of grapes and is steadily increasing production every season. The market for table grapes is huge, especially as new markets, such as China, Russia and the Middle East, are opening up and developing," he said.

A population of 14,000 residents, or roughly 20% of the population of the Karas Region, have formed a substantial community at Aussenkehr, which is the dominant area of production in Namibia. As more people arrive seeking employment, secondary industries are being established and Aussenkehr already supports large amounts of traders who bring in goods to sell from other parts of Namibia.

Vasiljevic said this situation has resulted in the need for the establishment of a town. Aussenkehr Farms last year donated an area of 600 ha and the process is already under way for the establishment of a town. " I believe that in years to come Aussenkehr will become one of the larger towns in southern Namibia," he said.

Grape farming is an excellent option for the Namibian economy. It is incredibly labour intensive, generates huge foreign exchange through exports, diversifies the economy, and leads to further development in the Karas Region, which historically was always difficult to develop. It is also responsible for creating support industries, as jobs being created in the grape industry result in substantial income for residents of Aussenkehr, who are then able to spend this disposable income on goods and services.

"We believe that a fully developed Namibian table grape industry will increase the Gross Domestic Product of Namibia by a further 10 % and will result in the creation of approximately 20,000 new jobs in the south. We believe that the development must occur over the next 10 years for Namibia to benefit fully from this industry," said Vasiljevic.

The strong Namibian dollar, which has appreciated against all the major currencies, has obviously had a negative impact on the revenue of the industry, with about 90% of the grape production being for export. "This has translated into selling prices being 30% lower than they were two years ago. The tough trading conditions have forced us to adjust our focus and, in particular, to realign our production to suit the new markets in the world," said Vasiljevic.

He said that in the past Namibia's earliness in producing table grapes allowed her to charge a premium on world markets, and Namibia was fortunate in those years to obtain very high operating profits as the only grapes on the European market.

"Today we have realised that increased competition from new early table grape-producing countries such as Brazil and Peru means that we must focus more on quality and yield rather than earliness of harvest," he said, adding that those two competitors have shown, over the past two seasons, that not only can they produce grapes at a similar time to the Namibian production but that they can also beat us in earliness.

However, he went on that Namibia still had an advantage as her climate at Aussenkehr was more reliable and this enabled her to provide top quality grapes to supermarkets in Europe every year without experiencing the problems suffered by her competitors, such as rain, frost and other weather-related problems.

"We have also focused on cultivar selection over the past couple of years in an attempt to boost our yields and also to have the right combinations of cultivars for our various markets. By boosting yields we will increase our market share and be in a stronger bargaining position when dealing with our suppliers and transport agents," he said.

"The competitiveness in the global market is making it more and more obvious that small-scale farming of table grapes is no longer an option for our industry. This is because small farmers are not in a position to supply several markets with their respective requirements. Furthermore, supermarkets are also putting more and more pressure on farmers to conform with their specific standards."

Vasiljevic said mining continued to distract their development, reiterating that there is no possibility that the two industries can co-exist in the same area. "The reasons for this are that with increasing global competition in the grape industry and with increasing demands from supermarkets for grapes to be grown in environmental-friendly conditions, we simply cannot afford to put our reputation on the line by having a mine in our backyard. We have no option but to resist attempts for mining to start at Aussenkehr," he said.

He said the grape industry was established after the independence of Namibia and that there was no colonial link as is the case with other industries such as mining and fishing. "We, therefore, have no excuse for not empowering indigenous Namibians. We have set ourselves a target that at least 50% of the industry should be owned by Namibians," he said, adding that currently about 30% of the industry is owned by indigenous Namibians.

"We don't want to be in a situation in ten years' time when politicians can say that certain groups have been excluded from this industry."

Vasiljevic concluded that the table grape industry in the Karas Region is now showing signs of maturity and that it would want to continue building on this momentum. He said it was important to emphasise that Namibia now has a new industry, which shows no signs of slowing down. Jobs have been created and so will many more. The Karas Region is benefiting from this boost to its economy and this is very important in a region which is not blessed with too many options for economic growth, apart from mining, tourism, fishing and small-scale agriculture.

Vasiljevic urged financial institutions in Namibia to take notice of the industry and to work with it to find ways that would allow it to develop further and provide opportunities for previously disadvantaged Namibians to be involved in this process.

He said there could be no excuse for Namibian financial institutions to continue turning a blind eye to the industry and encouraged investors to consider the industry as a potential investment as it is always available to discuss further development.