Namibia: Low Throughput to Remain Meatco's Challenge

4 August 2021

Low throughput is expected to remain a severe challenge for the Meat Corporation of Namibia (Meatco) for at least the next two years. This specific predicament weighed heavily on the corporation during the last financial year from February 2020 to January 2021.

However, in the 2020/21 annual report, Meatco CEO Mwilima Mushokabanji said plans have been put in motion to help address the low throughput, which is defined as the amount of a product or service a company can produce and deliver to a client within a specified period of time.

Outlining other challenges, Mushokabanji said the threat and risk of foot-and-mouth disease (FMD) outbreaks in the Northern Communal Area (NCA) remains a challenge. He said the challenge created anxiety among their clients in the United States, the European Union (EU), and China, and they had to be proactive in laying their customers' fears to rest.

In terms of financial performance, during 2020/21 the corporation generated N$873 million in revenue (2019/20: N$1.7 billion) and incurred a loss before tax of N$118.64 million (2019/20: N$113.66 million loss).

During the period under review, Meatco paid N$400 million to producers, which includes 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," Mushokabanji stated in the report.

"However, comparing this to our gross profit, we performed more favourably this year, than the previous year. This achievement was made possible by moving away from focusing only on throughput, or only on maximising our returns, as we did in the past, but by supplying the ecosystems approach of business management. This entailed focusing on the efficiencies of the entire value chain, making sure that we improved our sensing capabilities of dynamic changes in the environment," he further explained.

Meanwhile, Meatco board chairperson, Johnnie Hamman noted that the impact of Covid-19 on the hotel and restaurant industries, locally and internationally, led to changing consumer patterns, which had an influence on the products in demand, and in turn impacted the prices that could be realised in export markets.

"Another factor that comes to play is the need to restock the national herd after the drought. In the 1980s, the country had 250 000 slaughterable cattle available. The reality is, however, the size of the national herd continues to shrink and has been shrinking for the past two decades," said Hamman. - mndjavera@nepc.com.na

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