Fuel price hikes not only a concern

With petrol prices having gone up for the second time this year, the Economist caught up with one of the country’s leading manufacturers and distributors, Bokomo Namibia, to discuss how the company has been performing since the increments.
Tim Marais, sales manager of Bokomo, said that any changes in the fuel prices have an impact on the distributor, whether it is on incoming materials from South Africa – from where the company imports raw materials including maize and wheat as well as finished goods or whether it is on goods distributed from Windhoek outwards.
“All of the transport contractors we make use of have a ‘formula based agreement with us. Should the price of fuel change, the formula changes immediately, whether upwards or downwards. The implication of this change and the effect it has on the selling price of those products are then evaluated to see if the general price on that product can “absorb” the change or not. Should the increase in fuel price be subtantial, the additional cost factor will result in an increase in the selling prices of goods,” said Marais.
He added that where possible, Bokomo tries not to change prices with every fuel price change.
According to Marais, the company recorded some price increases; these increases were not only caused by fuel increases but a variety of reasons including higher electrical rates and increase in the price of packaging materials.
When asked one of the main problems that Bokomo is currently facing, Marais said that problems are part and parcel of our everyday life and is seen as challenges and addressed as such.
“The challenges vary from personnel issues, public holidays that create massive delivery problems, trucks that break down, electrical supply down-times, unavailability of skilled workers in some in some areas to constant changing raw material prices. The challenge is to get everyone working with the right attitude and efficiency,” he said.
Bokomo Namibia (Pty) Ltd is a manufacturing and distribution company situated 10 kilometres outside Windhoek. The company produces Nulaid eggs, Bokomo Purity wheat flour and Bokomo Purity maize amongst others.