No more agreements between Agribank and Witvlei Meat

01 Dec 2015 21:00pm


The Agribank of Namibia says it will no longer engage in future agreements with Witvlei Meat following a breach of agreement on the purchase of the Witvlei Meat Abattoir.

At a media briefing on Tuesday, Agribank Chief Executive Officer, Ambassador Leonard Iipumbu said Agribank leased the abattoir to the Witvlei Meat company since 2006 with an agreement that the company will purchase the facility at the then market value of N.dollars 15 million under specified terms and conditions.

However, the purchase agreement that was meant to transfer the ownership to Witvlei Meat was breached due to non-performance by that company and thus lapsed on 26 June 2015. Iipumbu said the absence of the transfer of ownership from the bank to Witvlei Meat and a purchase agreement deems Agribank as the owner of the abattoir.

"It must also be noted that the use of the abattoir for purposes of the present quota was never negotiated or agreed upon by Agribank, and hence the bank has not given any consent and/or approval to Witvlei Meat to apply for the Norwegian beef quota or any other beef export quota from the Meat Board as alleged in recent media reports," he said.

Iipumbu added that media reports that Agribank allegedly failed to comply with a court order on the transfer of ownership to Witvlei Meat was devoid of any truth. He said the first opportunity to purchase the abattoir for N.dollars 15 million and a settlement amount of N.dollars 3 million for outstanding rental brought the total to N.dollars 18 million.

The agreement between the bank and Witvlei Meat stipulates that the monthly rental fee is N.dollars 250 000. Witvlei Meat, however, breached the agreement by failing to provide acceptable guarantees to Agribank within the agreed 21 calendar days from the date of signature.

He said the bank would consult its stakeholders on the future operations of the abattoir, noting it is there for the purpose of creating employment and adding value, and therefore, Agribank would not allow the facility to stay idle. Should the abattoir be sold to interested parties in future, it will be sold at market value.

Witvlei Meat is a meat processing facility in the town of Witvlei in the Omeheke Region. It was established in August 2006 to, among others, export beef to the European Union (EU). However, the abattoir has been closed since February this year, leaving over 150 people without jobs. It is believed that a lower beef quota from Government is one of the reasons for closing the facility.

The quota allocation has always been divided on a 50/50 basis between Witvlei Meat and the Meat Corporation of Namibia (Meatco) during the past years, but the former Ministry of Trade and Industry reduced Witlvei Meat's export quota to Norway from 800 tonnes to 300 tonnes.