Savanna Beef raises N$146m in a private placement

At the moment, Meatco is the biggest exporter of beef in the country, and it appears plans are fast advancing to unseat the state-owned entity from its prestigious position.

Meatco exports beef to the USA, Norway, China, United Kingdom, Germany, the Netherlands, and Italy. It”;s biggest market in terms of exports is, however, South Africa.

The company, Savanna Beef Processors Ltd, was formed following discussions at the Beef Value Chain Forum (BVCF), which established that there was a need for a sustainable cattle slaughter and marketing industry, to ensure a prosperous future for the Namibian beef industry through profitable beef exports.

About N$200 million is required, and the current capital raised through equity amounts to 70% of the equity target.

Money is only being raised from beef producers.

Five hundred and forty nine producers are reported to have subscribed and have raised N$146 million, and now a strategy is being developed to fund the remaining share capital.

According to a statement from the company, an industry-led pre-feasibility study on the BVCF, which was concluded in early 2020, highlighted the shortcomings and assessed the profitability of beef exports.

These were addressed and followed up by a full feasibility study and a bankable business plan, which was approved by the BVCF members and led to the registration of Savanna Beef.

The first round of funding for the new export abattoir lasted from 24 April to 24 June 2022, during which Cirrus Capital, the corporate/transaction advisers, travelled throughout the country with members of the BVCF task team to present the project”;s investment strategy and business plan to Namibia”;s beef producers.

The targeted amount was in the region of N$100 million from Namibian beef producers, but that was surpassed.

There could be another round of funding in the second half of 2022, to fund the remaining N$54 million.

“With the private placement for Savanna Beef Processors Ltd, we embarked on a unique challenge to capitalise a newly incorporated public company and invite only beef producers to participate,” said Romé Mostert from Cirrus Capital.

The company”;s board features some of Namibia”;s wealthier businessmen, and is chaired by Mecki Schneider and Diethelm Metzger as his deputy.

Other board members include John Muinjo, Frederik Voigts, Harald Marggraff, Fanie Oosthuizen and Ebbie Fischer.

Schneider said the current capital raised shows that there is a need and desire to improve the profitability of cattle farming.

“Most of us were overwhelmed by the support that far exceeded our initial target of N$100 million. With this producer driven initiative we should take control of our product for the benefit of the producer. This initiative will further enhance the “Growth at Home” concept, with additional foreign currency earnings, further job creation and initiative to reverse the declining rural Namibian economy,” he said.

The offer was reportedly open to all beef producers registered with the Meat Board of Namibia, and did not specify either farmers beyond or within the red line.

– lazarus@namibian.com.na; @Lasarus_A on Twitter