Namibia: Meatco's Revenue Takes a Hit

The Meat Corporation of Namibia (Meatco) generated N$873 million in revenue in the 2020/21 financial year, down from the N$1.7 billion recorded in the 2019/20 financial year.

This is according to the company's 2020/21 annual report for the period 1 February 2020 to 31 January 2021, which was released this week. Meatco incurred a loss before tax of N$118.64 million, higher than the N$113.66 million loss recorded in 2019/20.

Meatco CEO, Mwilima Mushokabanji, said during the reporting year, and in stark contrast to the previous year, a better rainy season resulted in very few cattle available for slaughter as producers were restocking their farms.

"Therefore, a huge throughput challenge was then presented, with the slaughtering of only 36,074 cattle, in contrast to a total capacity of 120,000 cattle. This was far below our expectations, but we were aware that this situation could unfold," Mushokabanji said.

Mushokabanji said the low throughput will remain a challenge for the coming two years, but that they have plans in place to help address that.

The average cold dress weight South of the Veterinary Cordon Fence, (SVCF) increased from 229.3 kg in 2019/20 to 242 kg in 2020/21. North of the Veterinary Cordon Fence (NVCF), it increased from 197.2kg to 210.4 kg during the reporting year. Throughput in tonnes decreased from 26,583 tonnes SVCF to 8,697 tonnes, while NVCF increased from 224.1 tonnes to 262.4 tonnes.

Mushokabanji said there are endless opportunities in the Northern Communal Area (NCA), because throughput challenges exist not in the whole of Namibia, but only SVCF. He added the challenge that remains NVCF is although they have a higher throughput and good quality animals, no market exists for these animals.

He further said dealing with this challenge, Meatco is prepared to create markets for its products in the NCA, to improve competitiveness and profitability.

"This will be done through exploring markets in West Africa and elsewhere. We are currently exploring an expansion into the Ghanaian market. This will bring the Northern Communal Area into the mainstream economy, by getting more profitable markets for NCA farmers," he said.

During the period under review, Meatco paid N$400 million to producers, which include a premium of N$61.8 million above the South African parity price. The average producer price paid during the 2020/21 financial year amounted to N$44.74 per kilogramme compared to N$44.25 per kilogramme during the previous year.

Due to various cost-cutting initiatives across operations, Meatco made a saving of approximately N$25 million during the review period. The company's total administrative expenditure amounted to N$183 million, compared with a budget of N$221 million and prior year of N$208 million. This represents a saving of N$25 million against the prior year on administrative costs, despite the additional COVID-19 related cost of N$7 million.

"The reporting year was a year to stabilise the red meat industry, as well as making sure we are clear about our blueprint on where we are taking Meatco into the next 100 years by creating a lean, agile, and dynamic commercial public enterprise that is competitive, sustainable and profitable," Mushokabanji said.

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