Fresh and frozen chicken for local gourmet
“At present there is a scarcity of pork which is quite expensive while beef and mutton prices are also high. This creates a switch to poultry putting pressure on adequate supply” said Dawid Koen, Managing Director of Namib Poultry Industries.
Namib Poultry Industries which opened in 2012 at Okapuka some 30 km outside Windhoek, is operated by Namib Mills and is Namibia’s first large-scale commercial broiler producer. It supplies roughly 60% of the local demand for chicken.
But in its relatively short existence, Namib Poultry Industries have created 640 permanent positions at its Okapuka site, excluding sub-contractors. An additional 80 people work in the distribution network.
At the opening of the new facility by President Hifikepunye Pohamba, His Excellency considered the establishment of the new Okapuka operation as one of the private sector’s main contributions in accelerating industrialization and investing in agricultural businesses.
“This fully integrated broiler venture is the first of its kind in Namibia. We expect it to bring about the development of new technologies and skills in the poultry industry,” Pohamba said, encouraging the company to expand in order to supply the local market with quality poultry products and to create more long-term employment opportunities.
As a result of implemented import control measures, effected for an indefinite period, retail importers now need to motivate the quantity of poultry products they want to import into the country to a committee chaired by the Meat Board that will then make a decision and issue permits.
However, preference will be given to products not manufactured by Namib Poultry Industries.
Pohamba alluded to the fact that the Southern African Development Community now has more than 500 million consumers, with negotiations underway for an extended Free Trade Area beyond SADC which, it is anticipated, will open up new opportunities for local manufactures.
Namib Poultry Industries argues that in developing local capacity and protecting initial investment, it is vital to opt for industry protection to be able to compete with South American and EU imports that are subsidized and often dumped in African markets.
Koen said that the Namib Poultry project was never intended to monopolise the local market.“Certain products can not be manufactured by Namib Poultry Industries (NPI) for instance special products in “boxes”, e.g. crumbed products and products for further processing. At present NPI is supplying roughly 60% of the total market, slaughtering 250,000 broilers per week.
The chicken products are sold either fresh or frozen. Fresh chicken is sold under the NamChicken brand with 10 product lines while frozen chicken is sold under two brands, Realgood and Country Choice. There are 43 frozen product lines.
The price of chicken products have remained stable for the past 10 months. However, poultry prices in general are expected to be increased in March/April this year, due to inflation, and due to the escalation in yellow maize prices, which form the bulk of the chicken feed.
“Do not expect a price reduction soon, rather an increase in the near future due to the sharp increase of yellow maize prices. Maize forms 60% of the ingredients of feed and feed is roughly 60% of the production cost of a broiler.
With general increases like salaries and wages, water and electricity, etc., it is simply impossible to keep the price the same, let alone put through a decrease,” Koen said.
STRART-UPS ARE MORE EXPOSED
“All investors entering the market afterwards can come in with much smaller investments and do not have to enter into the total production chain (rearing, laying, hatchery, broilers, processing plant, cold store, distribution, etc.) which makes it much easier and more affordable,” he said explaining the large investments the Namib Mills Group had to make as pioneer poultry producer.
Infant Industry Protection from the Ministry of Trade and Industry for the N$600 million plant has not been introduced yet. It was expected that the project would have enjoyed infant industry protection for eight years with 46% in the first four years, 30% for the next two years and 20% in the last two years.
Quantitative restrictions have been put in place instead under the Import and Export Control Act of 1994.
In 2012 it was estimated that the value of import substitution would be in the region of N$350 million per annum which is a considerable direct benefit to Namibia.