What if a future President Julius Malema decides to celebrate his first month in office by banning Botswana beef in South Africa for as long a period of time as he was personally banned here?
That is not a scenario that a beef value chain analysis action plan even considers but the plan makes the point that reliance on exporting all Botswana beef through South Africa poses risks of disruption.
“South Africa and Botswana have long lasting cultural and trade links. Botswana Meat Commission owns cold facilities in Cape Town where all the beef intended for exports is stored in transit. Botswana’s over-dependency on South Africa poses a risk for future exports if the transport of meat is disrupted for some reason,” says the plan citing as possible risks, foot-and-mouth disease outbreak in South Africa as well as political and social unrest in the country.
It recommends that alternative routes for export, such as through Walvis Bay the Caprivi Strip in Namibia, be explored. However, what the plan doesn’t explicate ÔÇô which is an important factor, is that the level of economic integration between Botswana and Namibia, is very low. As just one example, it is not unusual for banks in Namibia to route money destined for Botswana through South Africa.
The one other point that the plan raises with regard to Botswana’s export market strategy is that while a lot of potential exists, BMC is almost entirely reliant on a single sales agent for its exports, and lacks any meaningful capacity to access market intelligence. The agent is GPS Food Group, a United Kingdom company which provides similar service to MeatCo of Namibia specialising in global procurement, supply chain management, logistics, and marketing services for meat protein products. The action plan says that as a result of this monogamous relationship with GPS (at least on the Botswana side) the Commission has limited export marketing and sales capacity as well as limited knowledge to effectively manage its outsourced export activities. BMC’s plants in Lobatse, Francistown and Maun produce a very narrow range of cuts, a problem that the plan says has to be addressed as a prerequisite for launching an effective export diversification strategy.
“There is limited scope for expanding volumes in the existing key export markets. South Africa is a relatively unattractive market, mainly for lower margin frozen beef, and it is becoming increasingly competitive. It restarted importing chilled beef in 2013, but this segment remains relatively small. Norway is a very attractive market, paying prices that are more than twice that of other countries, but an annual quota of 1600 tonnes limits further growth. UK is already the largest EU export destination, but further targeting of new customer segments could be undertaken to increase export volumes there,” the plan says.
The beef value chain analysis action plan was developed under the framework of the Private Sector Development Programme (PSDP) which is being implemented by Business Botswana.
