In conversation with
Mr Pieter Greeff
Managing Director | Etosha Fishing
FDI Spotlight: What is the history and DNA of Etosha Fishing?
Pieter Greeff: Etosha Fishing Corporation, first known as the Walvis Bay Canning Company, pioneered Namibia’s fishing industry in the 1940s with the country’s first fishmeal and canning plant. Today Etosha Fishing is a leading player in the Namibian fishing industry and considered to be one of the foremost round can production facilities in the world. It is based in Namibia’s main port city of Walvis Bay.
Etosha Fishing is proudly associated with the Lucky Star brand, the canned fish market leader in Southern Africa and well-known in many world markets, through a shareholding agreement with Oceana Group Limited concluded in 2000. It also cans Namibian horse mackerel under its own EFUTA Maasbanker brand and other well-known pilchard brands.
The company operates three well-maintained and highly effective purse seine and one trawler vessels. It subscribes to the vision “excellence in food processing” and operates under HACCP compliance and EU Accreditation. Its products comply with the National Regulator for Compulsory Specifications (NRCS) and Namibian Standards Institution’s (NSI) standards and regulations.
Throughout its history the company has contributed to the dramatic increase in the utilisation of pilchards for human consumption. In recent years the company broke ground with the introduction of Namibia’s first canned horse mackerel product range called EFUTA Maasbanker, the first Namibian canned product to receive the NSI Standard Mark of Conformity product endorsement. It also carries Halaal Certification and is a proudly Namibian product displaying the Team Namibia logo. It was successfully introduced to the Namibian retail market, now available on the shelves of all major retailers with year-on-year market growth.
What is your approach to value addition and why it is important to your industry?
Pieter Greeff: Etosha Fishing is the first company to start canning horse mackerel and the production of EFUTA Maasbanker is directly in line with the local Government’s policy frameworks underlining value addition and job creation to boost growth at home. It also materialised Etosha Fishing’s vision of putting the country’s most valuable fish resource in a can, offering the nation an affordable, nutritious meal from the sea.
Etosha Fishing is well-known for its innovative thinking in order to ensure the sustainability of the company and the development of the local fishing industry. With Namibia’s pilchard resource coming under pressure during the past decade, the company has been importing in excess of 20,000 metric tons of frozen pilchard annually for processing on local soil since 2010, which sustains local jobs and also serves as a significant boost for the local economy of Walvis Bay. The company also made significant investments in thawing equipment in order to process the imported frozen pilchard.
Despite the current pressures of a dwindling pelagic resource, Etosha Fishing is determined to remain steadfast in its commitment to sustainable resource management, job creation and industry development. It is geared to process imported frozen pilchard in order to remain afloat and will continue to develop and diversify its horse mackerel products.
In 2012 the Minister of Fisheries and Marine Resources requested that we look into where we can add value to one of Namibia’s strongest resources, which is when we launched the production of canned horse mackerel.
Marketing the product was a great challenge, in terms of taste and cost. We teamed up with Shoprite who offered to market the product for free if we give them product exclusivity for six months. This was a great way to introduce the product, and we launched branded tasting stands in Shoprite outlets, which was very successful.
In 2016 Namibia experienced an ongoing drought, which became a great opportunity for the company. The Ministry bought canned Horse Mackerel product to feed the Namibian people, so it reached the country at a much quicker pace than we expected.
The growth around our horse mackerel product has been unbelievable. In 2014 we sold 80 000 trays; (12 cans fit onto one tray). In 2015 we sold 160 000 trays and in 2016 we sold close to 400 000 trays. This was only in Namibia.
The next product we are looking into in terms of value addition is sardinella. We do not have sardinella in Namibia and will have to import it from Angola; we have already conducted several tests and studies on the process and on using the fish. However, one big challenge with using sardinella is that the fish do not throw their scales off during catching and pumping.
In Europe or Northern Africa, however, the people want the scales because they believe there is something wrong with the fish if is completely stripped of its scales. This is a good example of the difference in the markets and how we need to think about our processes and approach to value addition and innovation.
Given your recent growth, what is the capacity you would like to get to and how many markets do you think you can service?
Pieter Greeff: To cover our fixed costs, we have to process a minimum of two million trays a year. We are far from that at the moment and only canning horse mackerel will not give us those production numbers. That is why we can products for Lucky Star and Glenryck, which I believe are two of the strongest Pilchards brands.
We are moving into northern Zambia soon as some companies want to add canned fish to their product range. They are very interested in our products and the hope is that our growth will speed up across the board once we move in that market.
South Africa presents opportunities for us, however, there is 0 percent VAT on Pilchards in South Africa and 14 percent on all other fish products. Therefore there is an immediate 14 percent price difference on products, which makes it an undesirable market for us at the moment.
African countries face many challenges for intra-African and cross-border trade. How have you approached these issues to export your products as successfully as possible and to create value through exporting?
Pieter Greeff: We export to Botswana, Zimbabwe, Malawi, the Democratic Republic of the Congo and as mentioned Zambia.
In Namibia, we have excellent help for exporting and trading. Our penetration of the Zambian market is a good example. To export to Zambia, we have to apply for an export permit which cancels out any import duty; the Namibian authorities had the paperwork ready within a week of our application.
The Ministry of Trade and Industrialisation is incredible for assisting local companies. The people are willing to help; all you need to do is ask.
I honestly think Namibia’s government gives the country an advantage over other SADC member states. The work that is being done will pay off soon and it will mean great things for Namibia and for economic growth.
What is your opinion regarding the workaround sustainability in your industry and what do you think businesses can do to enhance the sustainability footprint?
Pieter Greeff: At this stage, we believe more in banking on what is available and making sure we survive if it is not. We are building the business on frozen Pilchard cutlets from Morocco, which I think is the best way to do it for now. We are importing raw material from outside, adding value and exporting the products afterwards.
Thus sustainability for us at the moment is not a focus, or a thought process we follow. Hopefully, the Rand does not weaken too much, as the Namibian Dollar is tied to it, so we can continue to import from Morocco and look at other markets.
Sustainability in using horse mackerel is also not a focus given at this stage because of the market acceptance of the product compare with canned Pilchards.
How can the level of investment into Namibia’s ocean economy be improved, especially given its importance and the recent decline in investment?
Pieter Greeff: Personally, I believe investment during 2017 and 2018 will still be low, due to 95 percent of the fishing rights expire in 2018. If you wanted to borrow from the bank to build a factory, they will be hesitant to give you money as no one knows whether you as an investor will still have a right to do so or to even make a profit from your production in that factory after 2018.
Shareholders are very hesitant to invest more money as well; they want to know their rights will be renewed and what the new structure in Namibia’s fisheries sector will look like.
Naturally, there are many opinions on the new rights going around. The only thing anyone in the sector can be sure of is that if you are not willing to change or play by the new rules, you need to get out of the fishing industry. There will always be changes to the rules, whichever industry you are in.
There is a lot of movement regarding freezing horse mackerel onshore and processing the fish on land. Freezing the product offshore does not require many people, therefore there is not a lot of employment or job creation involved in that method. The Namibian government has now been forced to change the regulations to allow for more processing on land and job creation and increasing the level of employment is one reason.
In Namibia, we have the National Development Plan 5, Vision 2030 and the Harambee Prosperity Plan, all of which promote the creation of jobs. The government is under pressure to fight poverty, which can only be done by creating jobs.
It is expensive to build an onshore production facility in Namibia. However, the return on investment is guaranteed; the investment case is there.
I am Chairman of Team Namibia and our main aim is to promote Namibian products and services. Our main challenge is funding of marketing initiatives. We are not being funded by the government at the moment and the money we work with comes from the membership fees.
What would an ambitious roadmap for Namibia’s future growth look like to you?
Pieter Greeff: We need an aggressive plan for local manufacturing. The opportunity for growth is there, across the board; in terms of our tourism. Namibia can be successful and achieve immense growth just because of the tourism sector.
The biggest criticism I have of the country is that we do not spend enough on education. The level of education and quality of graduates are not where it should be. There is also a lot of room for improvement regarding training our engineers. You can experience the quality of their training on our vessels in the fishing industry.
I think it speaks to a wider issue of not understanding you need specialised employees in certain industries, and if we cannot train them locally we need to be able to bring them in from other countries to not only work in the industries but to teach the locals.