Shot in the arm for beef
The beef production sector got a timely boost from the Development Bank of Namibia (DBN) when it announced this week its N$200 million financing for Meatco to add value to weaners, through its Backwards Integration Strategy.
Meatco’s Backwards Integration Strategy aims to address current conditions as well as structural weaknesses in the meat production industry and the financing from DBN is set to alleviate bottlenecks by providing for development of feedlots and additional procurement of cattle.
The finance is expected to have a far-reaching impact on the meat industry, since the veterinary restrictions imposed by South Africa on the import of weaners have resulted in a slump in the beef production sector.
To address the shortcoming of weaner production as a major activity of agriculture, the Meatco strategy will focus on adding value to beef by purchasing weaners from local farmers and raising them to slaughter cattle in feedlots.
Meatco said that N$150 million of the DBN finance will be used to fund procurement from local farmers and N$50 million will be used to develop satellite feedlots at Gobabis and Otavi which will also decentralise Meatco’s procurement operation. An additional 538 direct jobs will be created by Meatco as a result of the finance.
Through the financing from the Development Bank, Meatco intends to add value to 126,400 weaners. Instead of exporting live on the hoof, the cattle will be slaughtered and processed locally for export.
Development Bank CEO, Martin Inkumbi said although direct agricultural lending fell outside of the DBN mandate, agri-processing was within the scope of the Bank’s activities. The finance, Inkumbi said, would be used as operating capital for the transformation of Meatco’s operations as well as for development of additional facilities.