Namibia’s meat processing industry facing a crunch

THE financially unstable Mariental Abattoir which falls under the Farmers’ Meat Market is in the process of retrenching up to 50 of its 146 employees.

Its director of operations, Thomas Horn, announced on Friday that the abattoir had been forced to downsize as it was operating below its capacity. As a result it was running at a financial loss .Last year, Government announced that it would introduce a 15 per cent levy on the export of live cattle and small stock, as well as a 30 per cent levy on the export of raw hides and skins.The levy, that was expected to come into effect after October 2003, was mainly intended to halt the live export of small stock [sheep and goats].When Cabinet announced the higher taxes for on-the-hoof exports, the Farmers’ Meat Market positioned itself by investing heavily in its Mariental abattoir in the form of a N$4 million de-boning plant.While the abattoir has a maximum capacity of 950 sheep per day – adding up to roughly 230 000 a year – it slaughtered at 48 per cent of capacity this past year.During the same period, some 65 per cent of all marketable sheep left the country on the hoof.On Thursday, Government announced an export levy of 15 per cent on skins.However, no export levy was imposed on the export of live ‘slaughterable’ small stock.”This will have the direct effect that abattoirs will not be able to pay a competitive price to producers and therefore more than 95 per cent of slaughterable small stock will leave Namibia on the hoof,” Horn said.He said they had been left with no alternative but to downsize their operations.Last year, the Namibia Economic Policy Research Unit suggested that to save Namibian abattoirs, the Government grant export licences to farmers only for the same number of animals they slaughtered locally.Government wants all animals slaughtered locally and to promote the local processing of agricultural products in order to add value to the Namibian economy.There is no law banning the export of cattle on the hoof – only provisions for a tax or levy on such exports.As a result it was running at a financial loss .Last year, Government announced that it would introduce a 15 per cent levy on the export of live cattle and small stock, as well as a 30 per cent levy on the export of raw hides and skins.The levy, that was expected to come into effect after October 2003, was mainly intended to halt the live export of small stock [sheep and goats].When Cabinet announced the higher taxes for on-the-hoof exports, the Farmers’ Meat Market positioned itself by investing heavily in its Mariental abattoir in the form of a N$4 million de-boning plant.While the abattoir has a maximum capacity of 950 sheep per day – adding up to roughly 230 000 a year – it slaughtered at 48 per cent of capacity this past year.During the same period, some 65 per cent of all marketable sheep left the country on the hoof.On Thursday, Government announced an export levy of 15 per cent on skins.However, no export levy was imposed on the export of live ‘slaughterable’ small stock.”This will have the direct effect that abattoirs will not be able to pay a competitive price to producers and therefore more than 95 per cent of slaughterable small stock will leave Namibia on the hoof,” Horn said.He said they had been left with no alternative but to downsize their operations.Last year, the Namibia Economic Policy Research Unit suggested that to save Namibian abattoirs, the Government grant export licences to farmers only for the same number of animals they slaughtered locally.Government wants all animals slaughtered locally and to promote the local processing of agricultural products in order to add value to the Namibian economy.There is no law banning the export of cattle on the hoof – only provisions for a tax or levy on such exports.