Guest Contributor | Mar 16, 2018 | 0
Retain money to grow economy
Namibia Quality Beverages, as a fully-owned Namibian company, believes in promoting local products and that Namibian businesses should support each other.
“We are proud of what Namibian manufacturers have accomplished over the past few years against huge odds. But saying you are Namibian is one thing. We believe you have to live it. We produce a Namibian product for the Namibian consumer. Even our brand name 4U reflects this vision. Now, if we as a local manufacturer expect the local consumer to support us and if our motivation to them is that if they do, they will help us grow the local economy, how can we insult their loyalty and exploit their trust by not supporting local suppliers ourselves?” asked Charl Coetzee, CEO of Namibia Quality Beverages.
Coetzee added that the prices on the shelf are mostly governed by well known imported brands, and the loss is carried by the manufacturers. “But every time I see a Namibian child enjoying a Namibian product, helping to build a stronger, independent economy in which they will one day live, it reminds me why we do it.”
He further said that despite an annual increase in prices of local products which is linked to the country’s inflation rate, local produces are still in demand.
“Consumers expect an annual increase and accept this as part of life. It rest on us, the supplier, to ensure that this annual increase is market related and fair. However, we don’t believe that the price increase on our products is the primary driver for a reduced demand. Our consumers still want the product, but due to overall inflation the buying power of the consumer is reduced,” Coetzee said. He added that if people buy locally, wealth is created as the money is kept in the country.
“This would create more jobs. Every new job created, creates one more Namibian with buying power. This creates one more consumer. That means one more person adding value to local infrastructure though value added tax and pay as you earn (PAYE), leading to service improvements, living cost increasing and inflation dropping.
“In the long run you get returns on investment, if you purchase imported goods, the money goes out of the country and what return on investment there might have been is lost to you. It is that simple,” Coetzee said. Like many other manufacturers, such as Neo Paints, Coetzee said the greatest challenge to the local producer remains to be able to compete against imported products flooding the market. These are generally supplied by massive companies with a consumer base of millions on their doorstep creating the benefit of being able to sell quantity while their expenses are kept to the minimum.
“A supplier in Johannesburg for instance has more than eight million consumers in a 300 kilometers radius. While a local producer has a consumer base of only about two million distributed over the whole of Namibia with delivery distances in some cases exceeding a thousand kilometers.”
Coetzee continued to say that to be able to compete, the Namibian producer needs to grow to a point where they can export and compete on the doorstep of the opposition.