Push to suspend Meatco CEO amid privatisation standoff
• Recurring losses overshadow improved revenues
A cocktail of factors, not least privatisation and unhappy producers, have caused tension at the state-owned meat exporter.
A frantic push is underway to suspend Meatco CEO Mwilima Mushokabanji due to a myriad of challenges at the company, and amid talks that his opposition to privatising Meatco and perceived anti-red-line stance have earned him enemies across the conservative beef industry.
Mushokabanji has been at the helm of Meatco since 2020 - on a contract running until 2025 - but it has been a baptism of fire for the highly-rated youthful executive, who has previously cited the Covid-19 pandemic, drought and legacy debts as challenges befalling his tenure.
While under his tutelage Meatco has drastically reduced its debt, including clearing N$437.3 million owed to the Development Bank of Namibia, the company remains under severe financial stress.
The export company is in an insolvent position, has recurring gross losses – including a N$90 million loss this year – and is on a collision course with producers, who are the mainstay of Meatco’s existence.
In October, the company owed commercial farmers N$320 million for cattle delivered to its abattoirs. The capital bill has since been settled, but Meatco has not been able to pay interest from such debt – a situation that has infuriated producers.
Heated meeting
At a meeting last month with the CEO and a segment of the board of directors, producers called for Mushokabanji’s removal. That call is now being used as cannon fodder by a faction on the board to push for his suspension, but some members have argued that suspending the CEO is not the prerogative of farmers.
They asked the board to make its own assessment of the situation and arrive at an appropriate resolution.
At that meeting, which was so heated that police were on standby in case violence broke out, producers accused the board of ‘playing politics’ with their livelihoods.
Board members opposed to suspending Mushokabanji told Namibian Sun that he has become a victim of a witch-hunt for ‘stepping on toes’ after disrupting the beef industry south of the red line by activating trading in the so-called northern communal areas (NCAs).
Meatco has started selling tonnes of primal beef cuts through the NCAs, particularly Katima Mulilo, to markets south of the red line, which was previously deemed a taboo.
In addition, the company has established markets in Ghana and Angola for meat from the NCAs. Meat from the NCAs is not exported to the lucrative markets such as Europe, but producers south of the red line do export to those destinations.
Not an easy ride
Despite making revenue of over N$1 billion from 66 000 cattle slaughtered this year, Meatco has incurred losses of N$90 million. The company should be slaughtering about 70 000 cattle annually to break even.
Earlier this year, Ombu Capital - a consulting firm owned by former Standard Bank Namibia CEO Vetumbuavi Mungunda - was contracted to study the Meatco case, and advised government to transform it into an entity with private investors and farmers’ shareholding.
Mushokabanji is understood to be among those opposed to privatisation.
A board member also opposed to privatisation said: “Privatisation would lead to exclusivity of markets. Areas like the NCAs may be cut off completely because they are not a commercial priority. That part of the country would only be properly brought on board if the company carries state interest”.
The member, who is also against the proposed suspension, added: “More previous disadvantaged Namibians are now core players in the value chains after the NCAs were brought on board as a market. [Mushokabanji] joined the company in January 2020 and he inherited huge debts. In fact, in the same week he started, a bank came to Meatco demanding payment and threatening to liquidate the company.
“So, it has not been an easy ride for everyone, but we are fully committed to improve our operations. Our revenues for this year are the best for the company in the past four years.”
Political games
Mushokabanji yesterday declined to comment on the alleged attempts to suspend him, saying he may only speak to the media with prior approval from the board.
Meatco board chairperson Sakaria Nghikembua dismissed assertions that there were plans to get rid of the CEO. He asked for detailed questions to address the allegations.
One of the producers unhappy with Meatco, Riaan van Wyk, accused the company for unprofessionalism and bad management.
“One of the things we’re extremely unhappy with was that they lowered the prices after asking farmers to keep cattle in the feedlots for better quality. Keeping animals in the feedlot is not cheap, so pay us properly. Farmers almost went bankrupt from the lengthy delays in payments.
“Secondly, Meatco has not increased their prices for maybe five years now, despite the cost of everything else going up,” he said.
“At the meeting last month, we demanded a new management team, appointed with input from producers. We don’t care if managers are black, white, blue or khaki, but they have to be effective. If we don’t supply Meatco with meat, they will close down. They are using Meatco for political games.”
Mushokabanji has been at the helm of Meatco since 2020 - on a contract running until 2025 - but it has been a baptism of fire for the highly-rated youthful executive, who has previously cited the Covid-19 pandemic, drought and legacy debts as challenges befalling his tenure.
While under his tutelage Meatco has drastically reduced its debt, including clearing N$437.3 million owed to the Development Bank of Namibia, the company remains under severe financial stress.
The export company is in an insolvent position, has recurring gross losses – including a N$90 million loss this year – and is on a collision course with producers, who are the mainstay of Meatco’s existence.
In October, the company owed commercial farmers N$320 million for cattle delivered to its abattoirs. The capital bill has since been settled, but Meatco has not been able to pay interest from such debt – a situation that has infuriated producers.
Heated meeting
At a meeting last month with the CEO and a segment of the board of directors, producers called for Mushokabanji’s removal. That call is now being used as cannon fodder by a faction on the board to push for his suspension, but some members have argued that suspending the CEO is not the prerogative of farmers.
They asked the board to make its own assessment of the situation and arrive at an appropriate resolution.
At that meeting, which was so heated that police were on standby in case violence broke out, producers accused the board of ‘playing politics’ with their livelihoods.
Board members opposed to suspending Mushokabanji told Namibian Sun that he has become a victim of a witch-hunt for ‘stepping on toes’ after disrupting the beef industry south of the red line by activating trading in the so-called northern communal areas (NCAs).
Meatco has started selling tonnes of primal beef cuts through the NCAs, particularly Katima Mulilo, to markets south of the red line, which was previously deemed a taboo.
In addition, the company has established markets in Ghana and Angola for meat from the NCAs. Meat from the NCAs is not exported to the lucrative markets such as Europe, but producers south of the red line do export to those destinations.
Not an easy ride
Despite making revenue of over N$1 billion from 66 000 cattle slaughtered this year, Meatco has incurred losses of N$90 million. The company should be slaughtering about 70 000 cattle annually to break even.
Earlier this year, Ombu Capital - a consulting firm owned by former Standard Bank Namibia CEO Vetumbuavi Mungunda - was contracted to study the Meatco case, and advised government to transform it into an entity with private investors and farmers’ shareholding.
Mushokabanji is understood to be among those opposed to privatisation.
A board member also opposed to privatisation said: “Privatisation would lead to exclusivity of markets. Areas like the NCAs may be cut off completely because they are not a commercial priority. That part of the country would only be properly brought on board if the company carries state interest”.
The member, who is also against the proposed suspension, added: “More previous disadvantaged Namibians are now core players in the value chains after the NCAs were brought on board as a market. [Mushokabanji] joined the company in January 2020 and he inherited huge debts. In fact, in the same week he started, a bank came to Meatco demanding payment and threatening to liquidate the company.
“So, it has not been an easy ride for everyone, but we are fully committed to improve our operations. Our revenues for this year are the best for the company in the past four years.”
Political games
Mushokabanji yesterday declined to comment on the alleged attempts to suspend him, saying he may only speak to the media with prior approval from the board.
Meatco board chairperson Sakaria Nghikembua dismissed assertions that there were plans to get rid of the CEO. He asked for detailed questions to address the allegations.
One of the producers unhappy with Meatco, Riaan van Wyk, accused the company for unprofessionalism and bad management.
“One of the things we’re extremely unhappy with was that they lowered the prices after asking farmers to keep cattle in the feedlots for better quality. Keeping animals in the feedlot is not cheap, so pay us properly. Farmers almost went bankrupt from the lengthy delays in payments.
“Secondly, Meatco has not increased their prices for maybe five years now, despite the cost of everything else going up,” he said.
“At the meeting last month, we demanded a new management team, appointed with input from producers. We don’t care if managers are black, white, blue or khaki, but they have to be effective. If we don’t supply Meatco with meat, they will close down. They are using Meatco for political games.”
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