Clover listing no threat for Nam Dairies
Olthaver & List (O&L) Board Chairperson, Sven Thieme says the listing of South African dairy company, Clover, is not a threat to their subsidiary Namibia Dairies which supplies milk to the local market.
Clover has been in the Namibian market for a while but has not been able to penetrate the market extensively owing, in part, to restrictions implemented by the Government to protect Namibian industries from foreign domination.
Clover sales are slightly cheaper than milk products circulated in Namibia, and their listing see low to medium earners settling for them as compared to the locally produced dairy products which comes at higher cost.
Clover listed on the NSX at a time when local producers, including Namibia Dairies, have been enjoying infant industry protection from the Government in a bid to give them access to the shelves.
Thieme told The Villager that they have significantly penetrated the Namibian market and are not threatened by new market entrants.
“At the moment they have only listed. It doesn’t mean a lot. We have listed on the Johannesburg Stock Exchange (JSE) before and all it means is that should we wish to operate, we have the access to do so. I have not seen any plans from them, so it’s only a listing at the moment,” he said.
Thieme said that Clover, which also operates in Angola, Botswana, Mozambique and Nigeria, will not affect local companies with regards to the protection of Infant industries, because they have not announced that they will be setting up a super-farm.
”Anyone who wants to come here must be serious about the industry, not just to come here and distribute goods,” he said.
Clover, in 2013, was one of the companies which took legal action against the government as a result of the restrictions on milk imports when only 500 000 litres of cream and 200 000 litres of milk was allowed per month.
In September 2013, Government Notice No 245 was published by the Minister of Trade and Industry (“the Minister”) entitled “Prohibition on importation of dairy products into Namibia: Import and export control, 1994.
Terms of this notice placed quantitative restrictions on the importation of certain dairy products into Namibia.
The submission also referred to the industry protection previously granted, which, at the time, resulted in an increase in raw milk production and additional investments in raw milk production capacity in Namibia. It also referred to the size of the market and referred to the share of Namibia Dairies as being about 50% of the commercial dairy product market in respect of UHT milk.
When the company CEO, Johann Vorster spoke to South African media this year, he said that the court battles were unnecessary. He also told South African media that Clover’s next step would be to distribute its products countrywide using retailers such as Shoprite.
Clover can now set up shop in Namibia, after is listing on the NSX and its presence would be weighed against the effects on the Namibian dairy products and the possibility of job creation for Namibians. Clover’s listing on the Johannesburg Stock Exchange in 2010, generated N$500 million and it now hopes to achieve the same in Namibia.
Vorster made suggestions at the time of the listing would yield employment for Namibians as the product packaging would be done in Namibia despite the country’s proximity to the company’s production base.
Tiaan Bazuin, Chief Executive Officer of the Namibian Stock Exchange said, “We welcome all listings and adding Clover to the Namibia Stock Exchange Main Board deepens and diversifies the investment opportunities for the Namibian market, which is what the Namibia Stock Exchange strives for in terms of the Namibian Financial Sector Strategy.”
Andreas Kathindi: The Villager