Local disadvantage

Heiko Niedermeier, managing director of Neo Paints says local manufacturers battle to get their products on local retail shelves since they are excluded from rebate deals which major South African manufacturers make with large retailers.
In a recent submission to the Ministry of Trade and Industry, Niedermeier said “Generally retailers expect manufacturers to pay rebates for any products stocked by the retailer. These rebates are related to volumes sold and are commonly paid to the South African head office, thus resulting in a loss of Namibian revenue for the Namibian economy.”
Niedermeier maintains that local manufacturers also suffer a cash flow disadvantage due to the term offered to South African retailers. “Foreign owned retailers very often delay payments for goods purchased. This means that the manufacturer requires sufficient working capital. On this basis smaller (Namibian) manufacturers are automatically excluded from this business relationship because they can not afford the extra capital investment” he says.