THE TRENDS AND COMPETITIVENESS OF LOCAL MANUFACTURERS

By By Patrick Mankhanamba
November 2011
On the Move
A rolling stone gathers no moss. Namib Mills on the 1st of October, paid allegiance to this adage when it crowned Ian Collard Managing Director.

Collard has been with the organisation for 14 years and fits snugly into the executive chair armed with extensive experience and knowledge of the food processing entity acquired while working in various departments over the years.

The appointment comes at a time when, the Government department of standards in the country, National Standards Institution (NSI), has not only considered enforcing certain ‘inspection checks’ on the local manufacturers but also enforced certain ‘certification marks of conformity’ that will oblige them to strive for excellence in their manufacturing endeavours.

Collard’s long service contributes to the success story that has been written by Namib Mills; one of Namibia’s leading companies that mills maize, wheat and mahangu. The entity started as a humble milling company in 1982 and has since grown to become a world class food manufacturer in Namibia.

When Prime Focus finally caught up with Collard, it was clear from his relaxed mood that all is well.

With his 14 year long occupancy of various strategic managerial portfolios at the company, Collard speaks on how he has watched the positive side of Government’s involvement; particularly in instances where it helps to provide important guidelines for the way the local manufacturers structure themselves and adopt certain types of expansion strategies.

Says Collard; “If Government would purposely consider maintaining stable and transparent policy and regulatory frameworks that can promise redress of grievances usually complained of by local manufacturers, certain major determinants of competitiveness would be in order, including:

Demand conditions that are given to individual manufacturers by conditions in the market place as a function of what the manufacturer’s customers want, given that many customers also rely on manufacturing and processing standards, particularly to know what ingredients are present, due to dietary, nutritional requirements (kosher, halaal, vegetarian), or medical conditions (e.g., diabetes, or allergies), in addition to what they are willing to pay in the presence of alternative offerings from competing companies.

Factor conditions which include human resources, material inputs, technologies and knowledge, used in producing the products within individual companies.

Manufacture structures and strategies, which relate to the numbers and types of companies in the country and the strategies they pursue in responding to opportunities and challenges in the markets for their products and for their productive inputs.

Business relationships, which are determined by the backward and forward linkages of manufacturers to their suppliers, logistic systems and the physical and institutional infrastructure supports the manufacturers within a country.”

Then there is, of course, the role of Government and business associations in support of local manufacturers.

He adds, “Not only would local manufacturers in Namibia be able to function better but also that they would be able to deliver quality results. In so doing, on one hand, the local manufacturers would be seen complementing Government efforts to improving the country’s economic growth and access to world market.”

On the other hand, they would also be seen working alongside Government in the enhancement of the lives of citizens, fostering innovation and technical progress as well as achieving development when considered from each of the economic, environmental and societal perspective.

Commenting on current trends and progress in the competitiveness of the food processing industry in the country, Collard mainly talks about what’s happening in his company, as the leading miller in Namibia. Although the issues that he raises were primarily concerned with his company’s situation, nevertheless, they cut across several areas of concern within the sector.

According to Collard, Namib Mills, which has grown over the years, has been accorded the ISO accreditation.

Its trends of progress and stability in the competitiveness of food processing in the country, is attributable to several factors, including his company’s continued commitment to complying with not only the local NSI certification marks of conformity but also other standards that are internationally observed by International Standards Organisation (ISO).

This is besides the recent infrastructure development projects that have led to huge investments into some of the excellent physical and institutional infrastructure facilities previously never found in Namibia, for example pasta.

However, while Collard highlighted various improvements in all such key priority areas as the quality and safety of food products, the conditions under which food products are produced, packed and refined - besides the systems that help the company to manage its operations - the company continues to experience a lot of problems with raw materials, because they are produced and harvested in limited quantities, which leads Namib Mills to import 75% of its raw material supply after exhausting all the local supplies from the country’s agricultural activities. Imported products include sugar and rice, because these crops cannot be grown in Namibia due to climatic conditions.

According to a 2003 report on the competitiveness of the food processing industry in Namibia, compiled by Abrar Sattar and David Franklin, both of Sigma One Corporation for the Small and Medium Enterprise Competitiveness Enhancement Program, the conditions under which competitiveness was observed in the country’s food processing industry then were generally weak.

Among other things, the report revealed that in many cases, local food manufacturers experienced a lot of problems with raw materials, because they were produced or harvested in small quantities.

As a result, the scenario had led to the legacy of dependence on external food sources where Namibia has virtually become a net importer of most food and agricultural products, many years after Independence.

However, the Government’s insistence on conformity to strict standards and its eagerness to reduce the “dependency” on external food products has tremendously encouraged domestic production and value-added activities in the food processing sector in Namibia.

The National Standards Institution (NSI) has not only considered enforcing certain ‘inspection checks’ on the local manufacturers but has also enforced certain ‘certification marks of conformity’ that will oblige them to strive for excellence in their manufacturing endeavours.

The chairperson of NSI, Martha Kandawa-Schulz has called upon all manufacturers in the country to comply with the certification marks to meet the broader needs of society both locally and internationally. PF