Namibian blue chips post strong results

15 August–15 September 2011

Namibia has a strong track record of attracting foreign investment, and many well-known international companies play an active role in a wide variety of sectors including agriculture, fishing, mining, manufacturing, construction, tourism, telecoms and financial services. The Namibian Constitution promotes foreign investment and protects private property. Every month Flamingo brings you a round-up of the most important business and economics news from Namibia put together by Robin Sherbourne of local economic consulting company Namibian Economics. To receive regular updates on the Namibian economy, email robin@namibianeconomics.com

The N$500 million Namib Poultry Industries chicken project, which started construction in April, should be in full production by July 2012. Producing 250 000 chickens per week, the operation should provide enough to serve the entire Namibian market. The broiler will comply with EU standards from production to employment standards.

Gecko Namibia’s N$12 billion Vision Industrial Park that the company is proposing to develop north of Swakopmund faced criticism for its potential environmental impact at a public meeting held by the company to consult stakeholders.

Government has reconsidered key elements of a package of tax proposals that the mining industry believed would cause the industry serious damage. Deputy Minister of Finance Calle Schlettwein announced that proposals to subject the export of raw materials to a 5 per cent export levy to eliminate the zero-rating of exporters for VAT purposes and the raising of corporate tax on mining companies from 37.5 per cent to 44 per cent had been dropped, although the export levy would be retained, capped at 2 per cent and levied on a case-by-case basis.

The Karas Regional Council and Klein Karoo International based in Oudtshoorn in South Africa are exploring plans to revive the ostrich industry in Namibia.

Namibia’s regulatory regime for the pension industry is due for amendment so as to mobilise domestic savings to finance local investment. Amendments to pensions legislation will give the Minister of Finance powers to prescribe both the minimum and the maximum amount that a pension fund can invest in Namibia or in any particular asset class, including unlisted investments.

Bidvest Namibia announced a rise in trading profits of 47.7 per cent on the back of strong performance from its horse mackerel operations. Bidvest Namibia is sitting on N$780.3 million in cash, which the company intends to use for strategic acquisitions.

The Roads Authority signed an agreement worth N$44 million with the China Henan International Cooperation Group for the construction and rehabilitation of two bridges in the north.

Australian-listed uranium producer Paladin Energy announced it had received full financing of US$141 million for its stage-three expansion at Namibia’s Langer Heinrich uranium mine from a syndicate of banks comprising Societe Generale, Nedbank Capital, Standard Bank, Barclays Capital and Rand Merchant Bank.

Fitch Ratings reaffirmed its investment grade BB rating of state-owned Telecom Namibia. Fitch said it expects higher levels of investment this year, due to broadband network upgrades and the coming on stream of the West African Cable System (WACS) undersea cable.

FNB Namibia published its house-price index for March 2011, which it said showed that first-time house buyers are becoming fewer and fewer and that house prices continue to climb.

A 13.1 per cent, the average electricity tariff increase for the City of Windhoek came into effect. The increase had received approval from the regulator, the Electricity Control Board.

The IJG Business Climate Index, produced by the Windhoek-based Institute for Public Policy Research, edged up 0.7 points to 114.5 points in July, its highest level in four months, thanks to stronger metal and meat prices.

Refined zinc production from Namibia’s Skorpion Zinc Mine, owned by Vedanta Resources, increased nearly 19 per cent in the second quarter of the year, but remained about 9 per cent lower than in the second quarter of 2010.

AIM-listed Weatherly International said test drilling at its Tschudi Copper Mine in Tsumeb revealed sufficient reserves to make the project commercially viable.

Bureau Veritas Laboratory in Swakopmund confirmed that stolen uranium ore originated from AREVA’s Trekkopje Mine, currently under construction in the Erongo Region. Four suspects were arrested and charged with dealing with radioactive material.

The Windhoek City Council approved its Local Economic Development strategy for 2010–2015, which is aimed at creating new and better employment opportunities, a better environment for business and investment, and a more diverse and sustainable economic base.

The newly established Hilton Windhoek in the city centre of the capital applied for a casino licence, which, if granted, would bring the number of casinos in Windhoek to three.

FNB Namibia posted solid results for its financial year to 30 June 2011, with after-tax profits rising by over 17 per cent to N$539 million.

Namibia fell nine places from 74^th to 83^rd in the World Economic Forum’s Global Competitiveness rankings, due primarily to an increase in the country’s budget deficit.

Six board members were appointed by the Director-General of the National Planning Commission to oversee the workings of the newly created Namibia Statistics Agency.

Safland Namibia carried out a groundbreaking ceremony in Windhoek’s Kleine Kuppe suburb where it plans to build The Grove, the largest shopping mall in Southern Africa outside South Africa, at a cost of some N$1.1 billion.

The Development Bank of Namibia signed a memorandum of understanding with the Industrial Development Corporation of South Africa to cooperate on analysis and loan structuring of deals aimed at co-financing larger Namibian projects.

The Minister of Mines and Energy Isak Katali announced that there would be no change to the regulated price of petrol and diesel during September.

The head of the Namibia National Farmers Union (NNFU) Pintile Davids called on Government to review its export levies on animals, especially goats, exported on the hoof to South Africa, saying the levy hit poor farmers.

Consumer inflation rose to 5.4 per cent in August compared to 4.8 per cent in July, according to the Central Bureau of Statistics.

This article appeared in the Oct’11 edition of FLAMINGO Magazine.