The main challenge is that South African products are priced lower in Namibia than in South Africa in an attempt to kill local businesses. He was referring specifically to UHT milk, popularly known as long-life milk. “For example UHT milk in Cape Town is priced at R11 and in Namibia it is also priced at N$11. Where do they recover their transporting costs?” he asked. He explained that this means that in Namibia the products are sold at a discount of about 20 percent.

Author: 
Lorraine Kazondovi
Date published on SAFPI: 
Thursday, 28 June, 2012
Date published on source: 
Wednesday, 27 June, 2012
Source organisation: 
New Era

South Africa stifles local dairy industry

Mariental:  Namibia Dairies, a subsidiary of the Ohlthaver and List Group, loses up to N$20 million a year due to South African predatory pricing practices, while the production of Namibian cheese has already been halted, because the market has been killed by South African products. This was revealed by the Managing Director of Namibia Dairies, Hubertus Hamm, during a visit by Botswana President Lieutenant-General Seretse Khama Ian Khama to the dairy Super Farm at Mariental on Monday.

President Khama was accompanied by the Minister of Works and Transport, Erkki Nghimtina, and Hardap Regional Governor, Katrina Hanse-Himarwa, among others.

According to Hamm, because some countries close their borders to protect local producers, the company only exports about 3 percent of its produce to Angola, Botswana and the Democratic Republic of Congo (DRC), but none to South Africa. The main challenge is that South African products are priced lower in Namibia than in South Africa in an attempt to kill local businesses. He was referring specifically to UHT milk, popularly known as long-life milk.

“For example UHT milk in Cape Town is priced at R11 and in Namibia it is also priced at N$11. Where do they recover their transporting costs?” he asked.

He explained that this means that in Namibia the products are sold at a discount of about 20 percent. Furthermore, Hamm alleges that South African milk products use feed and genetic enhancers, medications and growth hormones, while it is illegal for Namibian producers to use any of them.

“The South Africans still import these enhanced products into Namibia and compete with us in the same market,” he complained. “We are addressing the Namibian government to rectify this,” he added.

“The rules have to be the same, otherwise Namibian producers will not survive,” stressed the MD.  He further said that Namibia is a European Union (EU) exporting country unlike South Africa, so Namibia is mandated to comply with EU standards and requirements.

The dairy industry is classed with the meat industry in Namibia, therefore Namibia has to conform to EU legislation for meat products and exports. South Africa does not subscribe to those laws, therefore that country has no status to export to the EU, according to Hamm.

“EU requirements should apply to South African products when consumed in Namibia to level the playing field,” he said. Hamm further accused South African producers of buying cheap subsidized products from other countries such as Brazil and supplying dairy products to the whole of Africa. “This is destroying the infant dairy business on the continent,” he stressed.

“If the EU can do that to us, why can Namibia not demand that South Africa adhere to Namibian legislation?” he asked, adding that Namibia must not allow lower standard imports.

“We need to protect the Namibian producers first,” he insisted, adding that if the borders of Namibia were closed to foreign imports the company would be able to supply the entire Namibian market within four years.

About 3 billion litres of milk is produced in South Africa compared to Namibia’s 2.5 million litres of milk per year. However, Namibia represents only 1 percent of the South African market, according to Hamm.

The Super Farm comprises of 3 000 animals, including 14 00 milking cows with each cow producing about 32 litres of milk per day. This equals about 43 000 litres of milk per day. The company’s target is to produce 55 000 litres of milk per day, according to Hamm.

“The farm can be expanded to accommodate 2 000 milk cows,” he added. Hamm says Namibia Dairies supplies about 50 percent of the Namibian dairy requirement and the farm alone, which employs 120 people, supplies up to 30 percent of the Namibian market.

All milk is sent to Windhoek to be processed into by-products such as Omaere, long life milk, juice, Oshikandela and yoghurt, among others. Namibia Dairies invested N$140 million in the farm since operations started in 2009.

The Hardap Dam supplies water to the Super Farm, which can consume up to 1 000 cubic metres of water per day, said Hamm.

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