Meat processing capacity utilisation shrinks to 30%

CAPACITY utilisation in the meat processing sector has shrunk to 30% from 60% in July owing to mounting production costs and challenges to procure raw materials, the latest update released by the industry shows.

By Tinashe Kairiza

Earlier this year, a global ban on the trade of Mechanically Deboned Meat (MDM) — the main ingredient in processed meat products severely impacted on the operations of industry players.

Imports of MDM, manufactured mainly from chicken bones, were suspended following findings from an investigation in Brazil showing the south American country was exporting meat products from diseased animals that included chickens and beef.

The scandal, which involved an intricate web of bribery, revealed that contaminated meat was being exported from Brazil.

The development triggered a price increase of MDM locally.

Market watchers forecast prices to continue on an upward trend.

In Zimbabwe, importation duty for Mechanically Deboned Meat, which is now pegged at 40%, has nearly crippled the operations of manufacturers while triggering an increase in the price of end products.

The Livestock and Meat Advisory Council (LMAC) said industry production costs have risen sharply, owing to an increase in the “international price of sausage casings and packaging costs . . . ”

“It was noted that challenges in procuring the required raw materials and escalating production costs are impacting on the production of processed meats, with some processors now operating at only 30% of capacity,” read the latest industry update report.

“Production costs have escalated with the threefold increase in the international price of sausage casings and increased packaging costs, following the banning of kaylite packaging.”

The industry, with a workforce estimated at about 3 000, has sharply scaled down operations while it is struggling to satisfy local demand for low-cost processed meat products.

“Together with the duty of 40% on imported mechanically deboned meat, the base ingredient in processed meat which is not manufactured anywhere in Africa, this is driving up the cost of processed meat and the ability of the industry to supply the mass market with affordable meat products,” said LMAC.

The industry update report noted that South Africa’s manufacturers can land processed meat products in Zimbabwe for less than what it currently costs the local players to procure all the raw ingredients required to sustain operations.

Zimbabwe’s meat processing industry has been pivoted on the importation of key ingredients namely MDM, casings and seasonings.

This has also created a market for locally produced beef and pork trimmings, chicken skins, vegetable proteins, herbs and spices.

All of the MDM used in Zimbabwe and South Africa is imported.

South Africa imports approximately 90% of its MDM from Brazil.

Processed meat was one of the country’s biggest foreign currency earners before the closure of Cold Storage Commission (CSCS).

Bulawayo’s Super Canners, owned by CSC, was the largest exporter accounting for over 70% of processed meat exports to the European Union.

Before halting operations, CSC was the largest meat processor in Africa, producing nearly 150 000 tonnes of beef and associated by-products a year.

Currently, industry players are producing about 2 000 tonnes of meat products worth US$5 million, driven by new processing plants set up over the past five years. Colcom is the largest meat processing firm in Zimbabwe.

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