Namibia Dairies weighs relocation costs

Namibia Dairies says it is still reviewing the cost implications of relocating the production of its milk products from South Africa to Namibia.

This was after the Ohlthaver & List Group owned dairy company had indicated its intention to move the production and packaging of Nammilk Full Cream and Low-Fat Ultra-high temperature (UHT) milk ranges from South Africa to its Avis Factory in Windhoek starting this month.

However, the milk processor told The Brief that it was banking on a due diligence exercise to be finalised at the end of the month to paint a clear picture on the costs and staff requirements for the local production and packaging of the milk ranges.

“An internal committee is currently looking at all the implications of the decision to bring Nammilk UHT milk production back on site – that is contractual obligation, cost, additional people needed in line with volumes projections, etc. This due diligence will be finalised by end June 2022 and will inform the final staff contingent needed for the UHT milk production. Until such time, there is a team temporarily in place to meet production needs,” the company said in response to an inquiry from The Brief.

On the possibility of a price increase as a result of the relocation of its production, the company said, “The pricing will remain unaffected for the time being. Namibia Dairies has and will continue to aim to minimise price movements wherever possible.”

The pronouncement by the company comes after early this month it announced that it will relocate the production of some of its milk ranges from neighbouring South Africa, a move which will also see the current brick packaging phased out and the Prisma packaging reintroduced.

The dairy producer said the decision was informed by improved local raw material supplies and the need to maximise the capacity of the local plant.

Namibia Dairies outsourced the production of its UHT milk to South Africa in November 2020, citing the reduction in local raw milk supply, a development which compelled the business to fill the shortfall that threatened its sustainability. 

Namibia Dairies, including then!Aimab Superfarm, is one of Namibia’s biggest dairy producers and has been severely impacted by the ripple effects of the COVID-19 pandemic and the ailing economy.

In April Namibia Dairies was forced to withdraw certain batches of its Nammilk Fresh Milk range after a quality test conducted by the company indicated that the product’s shelf-life was inadequate.

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Last modified on Monday, 20 June 2022 18:12

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