Meatco intends to enter the lucrative American beef export market by next year while a final audit for the Russian market will determine whether the Namibian company with its newly acquired 30 percent Government stake, will be able to put succulent Namibian steaks on the plates of Russian consumers in the near future.
Speaking at a meeting of the Windhoek Farmers Association last week, Meatco Manager for Livestock Procurement: Commercial, Abrie van Wyk, announced some of the exciting plans ahead for Meatco. He says the Euro is under pressure and the British Pound is very favourable, but only small amounts of meat is being traded in this currency. Meatc is gearing up to enter the American market to capitilise on the exchange rate by next year. “ “Unfortunately the Russian Rouble is also under pressure due to sanctions,” he notes.
Compared with international buyers, the local market is not yet a high-value earner for Meatco, accounting for just 11.5 percent of actual sales currently. Nonetheless, the Namibian market has high strategic value for Meatco as the company needs the raw material – the cattle – provided by local producers to enable Meatco to sell high-value cuts to international clients.
Meatco states in its annual report for 2014/15, released last week after the AGM in Windhoek where the company announced Government to finally take up its 30 percent stake in Meatco in the form of equity.
The European Union (EU) is a major export market for Namibian red meat, fish, and grapes, receiving 40-70% of Namibia’s agricultural exports. Preferential access to the EU market for premium beef cuts has made it possible for the Namibian red meat industry to upgrade its production facilities to meet international standards. Compliance with EU standards gives the country a competitive advantage over other beef producers in the world, including South African producers.
The highest value comes from our international markets, including Norway and the European Union (EU) – more specifically the United Kingdom (UK), Germany, Denmark and Italy. Meatco exports the bulk of its prime cuts (mostly from the hindquarters) to these countries as their markets provide the highest value for these particular products.
Meatco’s biggest market by volume in Africa is in neighbouring South Africa, which receives 38.4% of the corporation’s exports. Due to South Africa’s population size, income levels, and proximity, it remains a lucrative market for some of our beef products.
Having access to the EU market means Meatco conforms to the highest quality standards internationally. This gives Meatco the potential to access other high-value markets such as Asia, Russia and the United States of America since these countries regard compliance with the E standards as a measurement of compliance with their own standards.
Meatco tends to nlock these markets which would mean more value for Namibian producers and broader market diversification for the company.
In his presentation last week, Van Wyk said Meatco has a slaughtering capacity of 230 000 and the aim is to increase deboning capacity to 180 000 animals – 750 per day – in the next five years.
Meatco also aims at soon providing the infrastructure for 100 000 cattle at new feedlots at Annasruhe and Kombat to deliver some 20 000 animals via the Meatco Owned Cattle Scheme. “Unfortunately, the agricultural sector’s inflation rate hovers between ten and twelve percent while the Namibian inflation rate is between six and seven percent. This results in increased prices for producers being gobbled up by relative high agricultural inflation,” Meatco Manager for Livestock Procurement: Commercial, van Wyk, concludes.