Meatco's reasons for stopping sheep operations unreasonable

15 Jun 2013 07:00
WINDHOEK, 15 JUN (NAMPA) ? The Namibia National Farmers? Union (NNFU) said Meatco did not give farmers in the sheep industry good or understandable reasons for discontinuing sheep slaughtering, marketing and value-addition activities.
NNFU Executive Director Oloff Munjanu made the remark on Friday when approached to comment on the announcement of the corporation on Thursday that it discontinued its sheep operations.
?Meatco must simply give us clear answers on the matter. Farmers will lose out on the competitive prices paid by Meatco,? he said.
Meatco declared that the sheep business has suffered financially and that the corporation incurred heavy losses during the past five years, which become unsustainable to the group.
It raised the concern that there is an overcapacity of sheep operators in the country, which set the scene for natural attrition among the players.
The sheep slaughter plant at the Windhoek Meatco factory and Namibia Allied Meat Company (Namco), which is a 100 per cent-owned subsidiary of Meatco, form part of the corporation?s sheep business.
Meatco is the first company which has now closed its sheep operations. There remain now only three operators in the market.
According to Munjanu, the move will give the other abattoirs more space or throughput as Meatco will be out of competition.
He added that the NNFU is concerned about the many abattoirs which slaughter sheep by just skinning it and then exporting the carcasses.
This, he claimed, is meaningless and there is no value addition taking place while commercial farmers are underpaid and communal farmers are discriminated against.
?This is our problem, and government is more abattoir-friendly while producers are actually bringing the product on the market in the value chain. Even the definition of value addition is not fair, and our understanding is that value addition starts on the farm in production while Government and others only consider it from after slaughtering,? he stressed.
Meatco said the year-on-year decline in available raw material and throughput to the abattoir declined significantly, adding that out of all the sheep operators, the corporation was the furthest located from the source of supply, which translated in additional costs.
Meatco further said its value-addition plant, which was operated by Namco and produced deboned sheep, lamb and game products, was at the mercy of a volatile exchange rate environment which made this plant?s viability unreliable.