Meatco owes farmers N$300m
Meatco currently owes local cattle producers over N$300 million, and is already up to 88 days behind with payments.
"We are now faced with the problem the Livestock Producers Organisation [LPO] has been warning against for 15 years. We warned everyone that there will come a day when Meatco will no longer be able to pay its producers.”
This according to Thinus Pretorius, chairman of the LPO, which held its congress in Windhoek on Tuesday.
He said there are cattle farmers who are already threatening Meatco with legal action, while the industry is experiencing great discomfort over the meat-processing company's failure to pay.
"You can understand that taking N$300 million out of the industry brings great challenges," he said.
In the same breath, he added that the situation is not hopeless due to the fact that alternative markets are currently being developed, where two or three years ago there were no such prospects.
‘Cannot do without Meatco’
"A turnaround strategy is urgently needed to prevent the collapse of the entire cattle industry. We cannot do without Meatco,” Pretorius said.
While there are other alternatives currently being developed, these are not yet operational, he added.
“The timing is not good and currently we find ourselves in a vacuum. And in the meantime, we still have to put our product through.
"Our trust in Meatco has been destroyed and all 'evidence' and promises are being called into question. We cannot trust the current board and management - with the exception of the newly elected board, who must also prove to producers that they are worthy of our trust," Pretorius said.
Cattle farmers demand transparent, honest communication, he stressed.
"Keep farmers on the farms by paying them what is due to them on time - market-related prices."
Take heart
Pretorius also urged producers to take heart because alternative markets for cattle farmers are finally beckoning, which include the Savanna Beef Processors project, which is in the development phase.
"The lack of managing Meatco sensibly and keeping it a going concern gave the private sector the opportunity to enter the market.
"Never before has there been so much light in the tunnel for us as now. The last 100 metres of an 800-metre race is the hardest, but we are in the final," he said.
Pretorius highlighted the LPO's long history with Meatco and relevant authorities, during which the organisation attempted to help get the meat giant back on track.
"Despite the big media hype that was made that producers in the northern communal area will enter the market with exports to Ghana, the Democratic Republic of the Congo and the Middle East, among others, little has come of it,” he lamented.
Changed the demographics
Meanwhile, with the news that more entities are entering the beef market, Meatco has improved its producer price, Pretorius said.
"We currently earn between 15% and 20% more than our South African counterparts - which has never been the case before.
“The emergence of entities such as Savanna, the Rehoboth abattoirs and Beefcor changed the demographics of the market."
"We are now faced with the problem the Livestock Producers Organisation [LPO] has been warning against for 15 years. We warned everyone that there will come a day when Meatco will no longer be able to pay its producers.”
This according to Thinus Pretorius, chairman of the LPO, which held its congress in Windhoek on Tuesday.
He said there are cattle farmers who are already threatening Meatco with legal action, while the industry is experiencing great discomfort over the meat-processing company's failure to pay.
"You can understand that taking N$300 million out of the industry brings great challenges," he said.
In the same breath, he added that the situation is not hopeless due to the fact that alternative markets are currently being developed, where two or three years ago there were no such prospects.
‘Cannot do without Meatco’
"A turnaround strategy is urgently needed to prevent the collapse of the entire cattle industry. We cannot do without Meatco,” Pretorius said.
While there are other alternatives currently being developed, these are not yet operational, he added.
“The timing is not good and currently we find ourselves in a vacuum. And in the meantime, we still have to put our product through.
"Our trust in Meatco has been destroyed and all 'evidence' and promises are being called into question. We cannot trust the current board and management - with the exception of the newly elected board, who must also prove to producers that they are worthy of our trust," Pretorius said.
Cattle farmers demand transparent, honest communication, he stressed.
"Keep farmers on the farms by paying them what is due to them on time - market-related prices."
Take heart
Pretorius also urged producers to take heart because alternative markets for cattle farmers are finally beckoning, which include the Savanna Beef Processors project, which is in the development phase.
"The lack of managing Meatco sensibly and keeping it a going concern gave the private sector the opportunity to enter the market.
"Never before has there been so much light in the tunnel for us as now. The last 100 metres of an 800-metre race is the hardest, but we are in the final," he said.
Pretorius highlighted the LPO's long history with Meatco and relevant authorities, during which the organisation attempted to help get the meat giant back on track.
"Despite the big media hype that was made that producers in the northern communal area will enter the market with exports to Ghana, the Democratic Republic of the Congo and the Middle East, among others, little has come of it,” he lamented.
Changed the demographics
Meanwhile, with the news that more entities are entering the beef market, Meatco has improved its producer price, Pretorius said.
"We currently earn between 15% and 20% more than our South African counterparts - which has never been the case before.
“The emergence of entities such as Savanna, the Rehoboth abattoirs and Beefcor changed the demographics of the market."
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