Savanna Beef facility moves towards reality

The initial planning phase of the N$300 million independent producer-initiated beef-processing company Savanna Beef Processors Ltd has now come to an end, and the second phase of designing the details has started.

According to a statement from issued by Seigfried Mecki Schneifer, the chairperson of Savanna Beef Processors Ltd on progress made since the annual general meetings of BVCF as well as Savanna on 23 August, this was time well invested.

The statement added that site clearing and earthworks have also commenced, and large tracks have been prepared for construction as the company implements a viable business plan that would lead to securing sufficient equity to access loans for a state-of-the-art engineering project aimed at servicing the high-niche international markets.

“All this takes considerable detailed planning – from the diverse livestock to be delivered by producers from various production environments through to the slaughtering line with hygiene requirements, the challenging cooling processes, the deboning into specific cuts according to market needs, to preparing the logistics as requested by the international markets,” the statement says.

Schneifer says the design of the abattoir and processing facility, set on a 25-hectare property on farm Teufelsschlucht near Okahandja, focuses on the complicated process flow of a perishable product, with the emphasis on quality and hygiene.

To facilitate easier and efficient distribution of the workload, various committees were set up with external expertise.

These include the engineering and infrastructure committee, the marketing and promotion committee, the finance committee, and lately the veterinary standards committee.

These committees have struck agreements with utilities NamPower and NamWater, as well as obtaining an environmental clearance certificate and registration with the Livestock and Livestock Products Board (Meat Board).

Nexus was selected as the preferred contractor, with Emcon for electrical, mechanical and civil engineering services, and Scip providing the abattoir design.

“This grouping had the best alignment to the engineering, procurement and construction contract under the available finances,” Schneifer’s statement reads.

The company says a lot of hard work had gone into the financial planning for the project by the BVCF financial team and financial adviser Cirrus Capital.

After the annual general meeting the third private placement for producers was concluded with an additional N$19,97 million share capital, bringing the total producer equity to N$193,54 million (now over N$200 million with interest earned).

“It is important to note that for every 4 000 shares, a producer gets a preferential slaughter allocation for one animal per annum, with an additional price premium of 3%.

“Hence about 48 000 cattle are ‘secured’ from shareholders (producers) for a total slaughter capacity of 50 000 (96,7% of abattoir capacity),” the chairperson says.

According to the BVCF, the authorised share capital of N$250 million was increased to N$300 million to ensure further equity from foreign institutional investors.

The total financing requirements for the capital layout, including the engineering, procurement and construction contract, site costs, bulk water reclamation and treatment plant, NamPower infrastructure, rendering and water treatment plant, finance and operational costs, and Capex for operational readiness amount to about N$479 million, excluding a working capital facility of N$100 million.

Schneifer says the company had signed a subscription agreement with a marketing agency of N$40 million in share capital.

Another subscription agreement with Vortex Holdings Namibia Pty Ltd (VHN-Invest), a Germany-based institution, also of N$40 million in share capital, has been concluded.

This increased the share capital from N$200 million (from producers) to N$280 million from two foreign investors, demonstrating the confidence both foreign investors have in the project.

In addition, an Industrial Development Corporation loan agreement of N$150 million was approved.

“We also have an FNB facility for working capital of N$100 million, with a committed term sheet, on the table,” says Schneifer.

On the marketing and sales side, an agreement with an international meat trading agency has been agreed.

This would give Savanna the surety that markets for all parts of carcasses could be accessed under a transparent process.

“Support for the branding of our product is part of this agreement and will be pursued. The registering of trademarks in Namibia, the European Union and the United Kingdom is in process and to be concluded soon,” the chairperson says.

– email: matthew@namibian.com.na

CAPTION:

WORK BEGINS . . . Clearing of the site and preparations for site establishment to commence construction. (Bottom right): Arial view of a portion of site cleared next to the A1 highway – next to the off-ramp 20 km south of Okahandja – November 2023. Photo Contributed.