The Meat Corporation of Namibia (Meatco) is about to launch a new business model for its operations in the Northern Communal Areas (NCAs) aimed at providing better and more cost efficient services to communal producers.
This business model is Meatco’s new strategic approach to curb the recent operational losses of close to N$43 million in 2014/15. These losses were expected to be N$53 million in 2016 if Meatco continued with its operations in the NCAs. However, even while NCA abattoirs remained closed due to Foot and Mouth Disease (FMD), Meatco still incurred losses of up to N$ 12,9 million up to end of December 2015 due to overhead cost alone.
Meatco took over the management of these government owned abattoirs at Oshakati and Katima Mulilo since 1991/2 from the National Development Corporation (NDC). However the management agreement was converted into a commercial lease agreement for the lease of the said facilities in 2011 at a cost to Meatco.
The financial losses incurred by Meatco operations since 1991 are estimated at N$354 million up to 2014/15. This situation has prompted the Meatco members and board to direct management to develop a new business model that will address the financial losses while at the same time guarantee Meatco’s continued presence in the NCAs.
According to Meatco Manager: Corporate Affairs, Rosa Hamukuaja-Thobias the new business model (Mobile Slaughter Unit) is tailored to the unique circumstances of the communal producers in the NCAs and aims to bring slaughtering services closer to farmers in the NCAs.
“In this way Meatco continues to maintain its statutory obligation and also addresses operational losses which have accrued in running the northern abattoirs which was not economical or efficient as prescribed by the Act,” she said.
She said the benefits of the mobile slaughter unit are: reduction of transport cost for producer as the slaughter unit will be the one to go to farms / villages. This means that the abattoir goes to farms and farmers will not need to transport cattle over long distances, only core slaughter staff will be employed while the fixed-term seasonal support staff will be sourced in the villages were slaughtering will take place, thus creating employment locally, Operational flexibility as the mobile slaughter units will allow any amount of cattle available to be slaughtered with ease, Stimulating local entrepreneurship as all the offal will be sold directly to villagers, and small SME’s, reduction of operational costs as the cost of the mobile slaughter unit will be a fraction of the current fixed abattoirs,and opportunity to deploy the mobile unit in the areas south of the cordon fence.
According to Hamukuaja-Thobias, this will eventually allow Meatco to capitalize on a new business and income stream through game meat.
“The new mobile abattoir is expected to be operational by early July 2016. The future demand for slaughter will determine the amount of units to be ordered and deployed. Consultations with other key Ministries and stakeholders on the new business model are ongoing,” she added.
Resumption of slaughter in 2016
Meanwhile, Hamukuaja-Thobias noted that Meatco is well aware of the crucial need of farmers in the NCAs to resume with marketing of livestock after the double-sword of drought and FMD outbreak in 2015.
In this regard Meatco is waiting a crucial meeting of the meat industry on 10 February. This meeting will be attended by all stakeholders in the industry and is aiming to spell out the new rules of marketing livestock in the NCA after Foot and Mouth Disease (FMD) while addressing possible markets for beef originating from the NCA.
“Meatco operations will be guided by the outcome of this industry meeting. When the new rules are in place Meatco will resume with buying cattle from communal farmers in the NCA,” she said.
“While awaiting the arrival of the mobile slaughter unit, Meatco will keep those cattle in the quarantine camps depending on the availability of grazing and the overall condition of such quarantine camps,” she added.