…Superfarm currently has 1800 cows, 900 producing milk
…Superfarm is currently supplying about 65% of Namibia’s milk demand
…Namibia Dairies processes about 16,2 million litres of milk annually
Observer Money’s Chamwe Kaira talks to Dalinka Alberto, Namibia Dairies marketing manager on the performance of Namibia Dairies, its Nammilk products and the status of the !Aimab Superfarm at Mariental.
CHAMWE KAIRA (CK): How is Namibia Dairies/Nammilk performing in the current market environment?
DALINKA ALBERTOA (DA): Like probably all Namibians and most companies in Namibia at present, Namibia Dairies and by extension our product portfolio, feels the effects of rising global inflation, overall economic slowdown and contracting consumer buying power. Hence, we fully understand the pressure our loyal consumers are under. We, too, are shoppers and feel the pinch, and as a business we feel the same pinch. Aware that, as consumers’ financial circumstances change, purchasing behaviour changes and priorities are rearranged, we continuously strive to offer our consumers greater value for their money.
CK: What are some of the economic challenges facing the company?
DA: The overall economic slowdown and contracting buying power of customers in Southern Africa continues to have a pronounced effect on Namibia Dairies. Overall rising global inflation contributed and continues to drive raw material increases and so costs. The increases in fuel costs bear exceedingly heavily on Namibia Dairies’ operations, with the procurement of raw materials as well as distribution of final products directly impacted. As a dairy farmer, we also have fodder costs for our cows. The drought impacted our ability to produce our own fodder hence we need to buy and sometimes also import our feed to be able to produce quality milk. This in turn impacts our operational cost. Due to the distances we drive, our transport costs have increased significantly. To give you a clear picture, on average we drive 560km per day between Windhoek and Mariental and 750km per day between Windhoek and Gobabis to collect milk from other dairy producers to bring this to our factory.
CK: One of the biggest challenges has always been cheap milk imports from South Africa? How is Namibia Dairies competing with milk from South Africa?
DA: We have and continue to optimise our supply chain through concerted emphasis on efficiencies and sustainability. Our ongoing focus on and prioritisation of quality throughout our production processes mean that our milk is of top quality in Southern Africa if not the world. That said, given the disparaging economies of scale and pressure on the local dairy production as a result of high import costs, competing at eye-level is a severe challenge. This is why concerted government support of the local dairy industry is so crucial. Not only will this help stabilise the industry, but contribute to actual growth and so creation of jobs and local revenue.
CK: At what capacity is !Aimab Superfarm operating at the moment, is it meeting the local demand?
DA: Superfarm currently has 1800 cows in total of which approximately 900 are milk producing, averaging approximately 35L of milk per cow per day. As it pertains to demand: In terms of processing and packing capacity we can meet local demand, however, there is currently not enough raw milk supply in the country to fully meet local demand. With the ongoing ban on imports of heifers from South Africa, we do not foresee that we can address this short-supply in the near future. Of the current local raw milk supply, the Superfarm is currently supplying +/- 65%. We need to understand though that to produce more milk one must either have more cows, or the cows you have must be able to deliver more liters of milk per cow. There are two things you can do to achieve this. Either you buy more cows, which we cannot do currently because there are restrictions on the import of animals on the hoof due to foot and mouth disease, or you inject your animals with hormones to stimulate milk production. The Namibian Animal Healt
h Act and Regulation prohibits the use of hormones in our animals as this has an impact largely on our meat production but also on our milk industry. As a certified exporting country to the European Union, we are expected to produce quality, Namibian meat that is free of hormones and genetically modified organisms (GMO’s). This is what sets us apart from a South Africa and South African meat, but also what makes our milk so much better.
CK: The Superfarm produces 31 500 liters of milk, is it possible that an expansion of the farm will take
place in the near future?
DA: Mindful of the presently exceedingly challenging economic circumstances, we continue to focus forward as we fully believe in the future of the local dairy industry and manufacturing at large. By continuously augmenting and modernising processes to bring the farm ever closer to world-class operational standards, diversifying agronomy with low volume, high value crops as well as feed plants to continuously improve and optimise feed cost, we aim to notably grow our dairy herd and so increase milk yields over the next 12 months.
CK: In terms of quality, how do Namibia Dairies products rate compare with other products on the market?
DA: Given our core focus on quality throughout our value chain, Nammilk fresh milk, long-life milk and fresh cream ranges are of exceptionally high quality and can fully hold their own with all other dairy products in the market and even worldwide. Likewise, our entire portfolio is produced to the same exacting standards and are subject to the same quality checks before it reaches our consumers.
CK: What kind of protection do Namibia Dairies desire from the government?
DA: This industry urgently needs government intervention to ensure a sustainable industry going forward. We don’t have the luxury of time. A significant step into the right direction would be support from government in the form of import subsidies to improve the balance of trade.
CK: How much milk does Namibia produce locally and how much is imported?
DA: In the absence of holistic current statistical data – local and on imports – we can only state what we know of our own raw milk production and that of the external dairy farmers who supply milk to Namibia Dairies for processing which is about 16,2 million litres annually.
CK: Anything else that you may wish to add on the milk market in Namibia and its dynamics?
DA: We continue to see significant opportunity for stabilisation and steady growth of the dairy industry. That said, the economic depression continues to place dairy farming in Namibia under severe pressure. Namibian legislation does not permit the use of hormones in the production of milk, and long supply lines, having to import the majority of raw materials, as well as imbalanced economies of scale, heavily skew the playing field in favour of South African and other competitors. This unequal competitive situation is exceedingly burdening Namibian dairy farmers, so much so that many farmers struggle to maintain operations and might have to exit dairy production, unless the public and private sectors find a breakthrough. Again, a much-needed step forward would entail getting governmental support to even the playing field and balance the currently skewed economies of scale.
