Witvlei Meat closure leaves council in precarious position

By Rosalia David
January - February 2016
Prime Business

The Witvlei Village Council faces a bleak financial future without reasonable economic activity following the closure of the Witvlei Meat Abattoir some two years ago.

The unfortunate scenario took away N$65 000 per month from the Council, arguably the largest cheque they received from residents’ service rates, while throwing away 165 jobs at the abattoir.

This is at a time when the country is facing a rather worrisome unemployment rate which has left many job-seekers at bay.

Human Resources’ Officer (HRO) at the Village Council, Penehafo Johannes bemoaned the closure of the once-lucrative venture owned by business tycoon Sydney Martin.

 “Ever since the closure of the Witvlei Meat Abattoir, we have really lost out on business a lot.

Not only did it affect the Village Council, but it also left a lot of people in the streets and unable to pay their debts to the Council because it was the only income they got to pay their accounts”, she adds.

“It is also the only big income we depended on to sustain ourselves as a Village Council.  Nothing has happened after the closure, and nothing is still happening in terms of development.

People now have to depend on the pension fund of the grandparents, while some are just roaming around”, she adds.

Witvlei Meat Abattoir closed down on 31 October 2014 after losing N$27 million after beef export quotas were cut.

The closure came despite the government assuring Witvlei Meat that the reduced beef export quotas would have no financial implications for producers.

The abattoir’s closure also came with a N$22 million loss to shareholders, and it was stated that the industry would be set back between 7-10 years as Meatco would operate with no competition.

Despite the government’s plea for the corporate sector to invest in the village of Witvlei, the Witvlei Meat Abattoir building continues to dominate its skyline as the economic epicentre.

Witvlei Meat supplied land, seed and water to members of the Witvlei community to plant and produce vegetables, which were bought back and used in the kitchen.

In doing so, Witvlei Meat created job opportunities in the community.
Although Witvlei Meat was the only business the village relied on, it was not without its challenges.

Research shows that in 2010, the Government resolved a feudbetween Meatco and Witvlei Meat over the annual Norwegian beef export quota by brokering an agreement where Witvlei Meat would receive 50% of the annual quota to the lucrative market of the wealthy Nordic country.

News reports further revealed that Witvlei Meat, which was the country’s second-largest exporter of beef to Europe, claimed in 2010 that Meatco tried to prevent smaller meat exporters from exporting their products to Norway by grabbing the entire annual beef quota on the first day.

The company also protested this to both the Namibian Competition Commission and the Norwegians.
However, mediation efforts by the Government resulted in a mutually-beneficial agreement between the two entities.

They discussed the dispute at a meeting also attended by officials from the Ministry of Agriculture, Water and Forestry as well as the Ministry of Trade and Industry.

Research also shows that in 2015, Witvlei Meat was owed N$41 million by the Norwegian company Nortura. In a case filed in that country, the companywas alleged to have agreed to pay 12 million krone (N$19 million) in 2014 before auditors found that Witvlei was in fact owed an amount exceeding 12 million krone.