Cabinet moves to protect poultry industryBy: SELMA SHIPANGA
CABINET is in the process of finalising negotiations to grant Infant Industry Protection (IIP) to the Namibian poultry industry, The Namibian has learned.
Trade and Industry Minister Calle Schlettwein said he was not in a position to comment at the moment.
Although the details are still sketchy, The Namibian understands that one of the reasons for the industry protection is because unlimited quantities of lower-cost products are being marketed in Namibia, and that local producers are told by retailers, which are mainly South African, to match such prices or take their products elsewhere.
And because local producers are not able to match the prices of imported products being offered to local retailers, and cannot break even with such prices, this has apparently resulted in the loss of millions of dollars for local producers on a monthly basis.
A further factor is the importation of low-cost, and allegedly low quality, poultry products from Brazil, the world’s largest producer of poultry.
A small amount of these products is imported directly into Namibia, apparently mainly for institutional users such as school hostels and hospitals.
When he spoke to The Namibian last month, Gys White, the managing director of Namib Poultry Industries (NPI), said there was a need for protecting the local poultry industry, adding that local producers are competing with huge industries in South Africa that have been in business for over 50 years and have a big capital base.
“We are losing millions at the moment and we really need that protection for us to protect our local industry. For us to compete against them in future, we would need protection for the first few years. We need to establish our own Namibian brands and this means we need to train people as well as build relationships in the market, and these are exercises that cost money,” White said.
“Our aim is to become competitive in the first few years, and then once we are established, we can then compete with the bigger brands outside.”
Well-placed sources said a company like Namib Poultry Industries is losing around N$6 million every month.
The Namibian understands that in order to protect the local industry, a recommendation has been made for the government to control the quantities and quality of poultry products imported into Namibia. No operator in an industry benefiting from IIP may increase prices arbitrarily or commensurately with the proposed rate of additional duty.
The Namibian further understands that the Ministry of Trade and Industry is to establish a monitoring mechanism to monitor amongst others pricing structures of domestic manufacturers, production costs, sales and employment.
Cabinet has also been asked to approve the imposition of import permit requirements for poultry products as a complementary measure, and to approve limiting imports to a minimum of 600 tons per month.
These moves come shortly after the government pulled the plug on the IIP for the dairy industry after its eight-year period came to an end early last year.
Schlettwein last month ruled out further protection for locally produced ong-life milk and said alternatives must be sought to save the struggling dairy industry, which is facing stiff competition from cheap foreign imports.
Schlettwein’s remarks came after Namibia Dairies announced last month that it would cut the milk delivery quota of local dairy farmers by 50%, which will result in major economic challenges for the country, as well as job losses.
“The industry has had protection for the past eight years which was paid for by the consumer, but they were still not able to maintain the industry. The door of protection is closed to them for now. We now have to see what the issues are and how we can make the industry more competitive,” Schlettwein said.