3. Highlights - Markets Further development of world class & unique Brand
Realised 50% growth in B grade returns from RSA market via
Woolworths “Free Range” products
Obtained acceptance of NCA product as “Free Range”
Secured entry to retail market in Norway
Cost of re-allocated Norway quota amounted to N$ 1.35 kg
Further development of EU and Scandinavian markets;
Further creation of logistical and production capabilities to
implement market-led strategy
Obtained market access to middle east, with other markets
being pursued
Successfully completed audits by BRC, ISO, SABS, Heinz &
Woolworths
Further enhancement of quality systems; and
Significant decrease in non-conformances and claims
4. Highlights - Operations Further improvements on plant flexibility
Radically improved marketing logistics through
direct shipping and use of Walvis Bay
Improved yields and production efficiencies
Improved performance of Cannery
Integrated daily production and marketing
planning
Live procurement in communal areas
Introduced world class precision feeding and
controls.
5. Highlights - Performance Significant cost savings against prior year (N$
27.8 m)
Improved stock control and stock management
Improved working capital management with
the utilisation of only N$ 4.9 million for
operational activities
Simplified group structure through the
deregistration of two subsidiaries
Establishment of fully-fledged Internal Audit
division
Refinement of Board and subcommittee
charters
Commencement of Board evaluation process.
6. Highlights - Other Passed ethical audits
Received peer review awards for recognition of
business practices
Utilised Meatco Foundation for the implementation
of several major projects and by using donor
funding completed water project amounting to
approximately N$ 1 million
Successful completion of veld-lotting trials.
7. 2010/11: Overview
The Group reported a net profit for the year amounting to N$ 5.7 million.
Highlights are:
• Increase of 9.95% in revenue;
• Increase of N$ 3.76 / kg or 18.19% in producer prices;
• Gross profit margin increased from 1.8% to 13.89%;
• Producer payments above SARMAA = N$ 24.4 million;
• Decrease in overall administration costs = N$ 27.8 million; and
• Total cash generated from operating activities = N$ 59.1 million.
However,
• Overall 7.1% decrease in slaughter numbers (11,890).
The annual financial statements will
be discussed in more detail during
the next session
8. 2010/11 2011/12
Exchange rate similar to that of prior year – except for period Nov ‘11 & Dec ‘11
However, only 14.98% of our sales occurred during this period
9. Change in average producer price (SVCF)
Year Volume N$ / kg Year Volume N$ / kg R/Kg Difference
1992/93 152,285 4.90 2000/01 141,133 10.25
1993/94 168,463 5.00 2001/02 143,161 12.20
1994/95 160,330 7.60 Volumes are major concern
2002/03 149,109 15.00
1995/96 158,958 7.80 2003/04 142,843 11.80
1996/97 169,969 7.60 2004/05 143,305 12.35 N$ 24.4 million in premiums
1997/98 91,435 8.15 2005/06 138,949 12,85 11.40 1.45 / kg
1998/99 127,461 9.00 2006/07 110,397 18.03 16.19 1.84 / kg
1999/00 158,073 9.75 2007/08 109,468 17.93 16.16 1.77 / kg
18.19 % increase 2008/09 118,732 23.59 17.57 6.02 / kg
2009/10 117,567 22.29 18.11 4.18 / kg
2010/11 114,150 20.67 18.84 1.83 / kg
2011/12 102,680 24.43 23.54 0.89 / kg
10.
11.
12.
13.
14.
15. Decrease during 2012/13 mainly due to change in sales mix
(8.95% more manufacturing cuts sold)
16.
17. Ekwatho / Feedlot contribution
Ekwatho Feedlot
Number of units 8,906 cattle 18,330 cattle
Contribution to gross profit for 2011/12: N$ 0.42 / kg N$ 0.42 / kg
These initiatives supported the
producer price with N$ 0.84 / kg
during the year under review.
18. Change in producer price structure
• The target carcass weight amended
relate to a range of between 200 kg
and 219.9 kg per carcass;
• Introduction of “Fat equalization
premium”;
• Introduction of “Age Gap
Adjustment”; and
• Off-season premium to also include
cattle with 5-6 teeth as well as C-
grade cattle (at 50% of premium).
19. Northern Communal Areas
Highlights:
Losses in NCA decreased by
22.2% from N$ 29.3 million
to N$ 23.3 million
Slaughter volumes increased
by 2,771 (18.2%)
Food and Mouth Disease
caused closure of Katima
Mulilo
NCA product certified to be sold as “Free
Range”
21. Decrease in slaughter volumes
Namibia has been experiencing a • Producer price cycles;
consistent decline in slaughter cattle
volumes since the early 1990’s • Bush encroachment;
• Production diversification;
Declining slaughter numbers are not
just a factor of producer price. • Declining commercial productivity;
• Export of live animals;
• Competitiveness of farming system (cost
of weaner production vs. slaughter ox
production.
22. Feedlot unfair competitive advantages
The main concern is that neither Meatco, • Purchase of dry Namibian weaners
nor Namibian ox farmers can compete • Use of growth stimulants
with the production efficiencies of South • Relatively low feed cost
African Feedlots. • Purchase power (Karan = 500,000)
• A Grade carcass market
• Export weight cut-off (450 kg)
• Weaner to carcass ratio
• Increased live exports
• Shortage of weaners in RSA
Converting Namibian production to
simulate South African production will
further decrease producer value and add
to market diversification risks.
Industry Dilemma / Challenge
23. Other key issues
Other key issues that has a significant impact on the financial results of the
Corporation and, if left unattended, will continue to negatively affect the
Corporation :
• Underutilisation of existing • Decreasing commercial slaughter
slaughter capacity numbers
• Inflexible labour regime • Increasing local slaughter capacity /
overcapacity in local market
• Relative strength and
volatility of the ZAR/N$ • Perception of low slaughter prices
despite benchmarking
• Constraints of the Namlits database
24. Other key burning issues
• Government industry policy positions (Norway / imports / grading - standards
/ capacity / live exports)
• Namibia NETT EXPORTER but HIGH COST and LOW VOLUME
• Unfair South African Feedlot competitive advantage: Hormones etc
• financial , geographic and volume dominance of South African Feedlots/
geographic advantage
• Veterinary health status of NCA
• Ineffective control and monitoring over live exports (weights etc.)
26. 2012/13 and beyond
World Economy – very tough next 3 years
• ownership status of Meatco will be key to future success
• Focus on customer/market centric strategies in high value markets;
• Further develop logistical and operational capabilities
• Penetrate new high value markets (e.g. Iran and others )
27. 2012/13 and beyond
In addition, to continue to:
• address the declining volumes & re-align capacity/utilization
• maintain our cost saving and efficiency enhancement drive
• unlock further commercial value through value addition
• through the Meatco Foundation, make an impact on the developmental
challenges facing the agricultural sector, specifically the livestock industry –
leveraged with donor funding
