Here’s what we now know about the National Youth Service (NYS) taking over the Namibia Grape Company (NGC) last month.
Why did government go to such lengths to acquire and donate such a lucrative business?
In September 2007 the Government of the Republic of Namibia decided, through a Cabinet decision to purchase the Namibia Grape Company (NGC) and transfer it to National Youth Service on the basis that it will strengthen the capacity of NYS in delivering its mandate of empowering the Namibian youth.
Did any money change hands and how much?
In terms of the sales agreement between GIPF and Government, the purchase price was set at N$56,6 million. However, the value of the company has increased to more than N$ 322, 322, 000.00, when revenue and assets are taken into account.
What is the Namibia Grape company, its size and what really does it farm?
Namibia Grape Company Farm is a staple grape producer on land measuring 770 hectares land located in Aussenkehr. 475 hectares was developed and planted with table grapes and 50 hectares is available and suitable for future development. The Farm has seventeen (17) cultivars planted on 475 hectares and these are grouped in:
- Red seedless – Early, mid and late
- White seedless – Early, mid and late
- Black seedless – Mid
- Red seedless – Mid
What is the current staff compliment of the business?
The NGC employs 247 permanent staff :
- Management staff – 48
- General staff – 199
- Seasonal 1311 which will increase to 1700 during harvesting time
Now that the farm and its entire operations have now been donated, does the NYS have the capacity to manage it?
NYS is the new owner but all day-to-day operations will be left to NGC management and Board, working under signed management and marketing agreement with Capespan South Africa. Namibia Grape Company is a successful and well-run company with own management and Board of Directors. The Management team at NGC has vast experience in grape farming spanning more than 15 years.
Farming is a cash intensive business. How much investment does the NYS plan to make into the business?
Grape farming in Namibia is seasonal and requires sufficient liquidity to ensure operations throughout the year. For most part of the year, operations relate to preparing the vines for the next crop harvest, which in Namibia is from November to January of each year. NGC is currently able to meet all its financial obligations and doesn’t require any immediate cash injection from NYS. However, any investment will carefully be considered to ensure that there are returns on such investments. As an independent company, NGC will be able to make such investments as and when a bankable business case is presented by potential funders. Since 2007, NGC has financed all the investments without any capital injection from external sources.
Is the NYS planning to value add from the grapes farmed?
The value addition intervention undertaken is the production of raisins (dried grapes) which are also exported to South Africa for grading, packing and exported further to international market. There is no facility in Namibia to process and pack raisin grapes because the volume is quite small.
- Any value addition needs a huge investment and before that there must be enough raw materials supply which is not the case with juice processing as value addition.
What are the current markets for the grape produced and does the business have an offtake agreement for the grapes produced?
NGC has a market share in the Namibian grape industry as follows: Europe 44%, United Kingdom 36%, Africa 15%, Far East 2%, Middle East 3% and this how the market distribution was for 2020/21 season. The market remains the same for 2021/22 season but percentage will differ.
Off – take
The Company has signed off-take agreements both local and in international markets in Europe, Africa and the Middle East.
