Cold Storage Port Facilities for Agri-Produce

Grassland, a prairie, a pampas, a pasture
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Cold Storage Port Facilities for Agri-Produce
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Food and Agriculture
Business Model Description

Develop cold storage facilities at the port of Walvis Bay (and others, as emerging) for agri-produce to create a temperature controlled supply chain.

Expected Impact

Position Namibia as a transshipment gateway providing high quality and affordable produce for Southern African Development Community (SADC) markets.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
15% - 20% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
Namibia requires 12,500 tonnes of additional cold storage capacity to serve market potential.
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Zero Hunger (SDG 2)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Responsible Consumption and Production (SDG 12) Life Below Water (SDG 14)
Country
Regions
  • Namibia: Erongo Region
  • Namibia: ǁKaras Region
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
FB

Development need: 25% of Namibia's population is food insecure (II), including due to persistent drought situations (IV) and the country's farmers facing challenges to access affordable financing (V). SDG 2 on Zero Hunger is "stagnating" and faces "major challenges" in Namibia (I).

Policy priority: As captured in Namibia's 5th National Development Plan (NDP5), the Government seeks to transition from a provider of live animals to exporting value-added agricultural goods, and increase food and livestock production by 30% and 10% in 2022 (II). Although the agriculture sector only contributes 3-5% to GDP, it is a Government priority as it employs 23% of its population (III).

Gender inequalities and marginalization issues: The majority of the 167,242 jobs in Namibia's agriculture sector are within rural areas of the country. Only 21.1% of the workforce is female (III), signaling a major opportunity to provide additional income generation opportunities for women.

Investment opportunities introduction: Agriculture, among others, generates significant multipliers: an increase in final demand of NAD 1 million (USD 72,000) for traditional agriculture is likely to generate an output twice that value as well as GDP and income for roughly the same value (VI). This is expected to lead to the development of Namibia's economy and result in poverty alleviation (V).

SubsectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Agriculture
FB.1

Policy priority: Namibia's Government focuses its efforts for greater food security on developing the agro-processing industries by utilizing local produce and strengthening regional value chains, as well as increasing the agricultural production for cereals, horticulture and livestock (II).

Gender inequalities and marginalization issues: An increase in final demand for traditional agriculture is expected to generate the highest impact among low-income households in Namibia, benefitting marginalised communities and women, among others (VI).

IndustriesMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Agricultural Products
FB-AG
Investment Opportunity Area

Cold Storage Port Facilities for Agri-Produce

Business Model

Develop cold storage facilities at the port of Walvis Bay (and others, as emerging) for agri-produce to create a temperature controlled supply chain.

Critical IOA UnitDescribes a complementary market sizing measure exemplifying the opportunities with the IOA.
Namibia requires 12,500 tonnes of additional cold storage capacity to serve market potential.

Namibia currently has a cold storage capacity of 12,500 tonnes; the country's market potential necessitates ramping up the capacity to 25,000 tonnes (10).

The total container throughout capacity overall increased by 10%. In 2020 / 2021, the ports of Walvis Bay and Lüderitz handled 135,194 TEU’s (20-foot container boxes), which is a 10% increase in comparison to the 128,779 TEU’s handled in 2019 / 2020 (9).

Zambia, Angola, Democratic Republic of Congo, Botswana and Zimbabwe are the main markets for transit cargo by volume at the Walvis Bay port (9).

IRRDescribes an expected annual rate of growth of the IOA investment.
15% - 20%

A benchmark project, the Meatco's Okahandja Abattoir, achieved an IRR of 15-20% as a major driver of its repurposing into a cold storage facility (11).

TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)

While no agri-produce cold storage facilities (excluding for fish) exist at ports and no empirical data is available for investment timeframes (19), loans suitable for cold storage port facilities, offered by FNB, Bank Windhoek and the Development Bank of Namibia, have a tenure of 5-10 years (12).

Market - Highly Regulated
The monopolistic situation of the port in Walvis Bay and of the Namibian operator can be a risk for private sector involvement, especially for long-term investments, given resultant uncertainties (5).
Sustainable Development Need

Namibia lacks adequate storage facilities that allow for agricultural value addition. Cold storage facilities needed to maintain the lifespan of fresh produce are limited, which results in raw products being exported and re-imported into the country for value addition (5).

In order for Namibia to leverage AfCFTA opportunities, it needs to become a commercial gateway where refrigerated container trade involves the imports of food products for landlocked African markets. The level of refrigerated container activity is related to market size and economic development (1).

Gender & Marginalisation

Smallholder farmers are excluded from enhanced market opportunities when value addition takes place outside of Namibia.

Expected Development Outcome

Reduced losses of perishable products thanks to increased access to storage facilities (3).

Enhanced port traffic and revenue, and improved strategic logistical significance of Walvis Bays port in the region, leading to generally greater economic activity in Namibia.

Gender & Marginalisation

Smallholder farmers, who tend to be marginalised and suffer most from limited economic opportunities, obtain access to national and international markets and operate with greater productivity.

Primary SDGs addressed
9 - Industry, Innovation and Infrastructure
Industry, Innovation and Infrastructure (SDG 9)

9.1.2 Passenger and freight volumes, by mode of transport

2 - Zero Hunger
Zero Hunger (SDG 2)

2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size

Secondary SDGs addressed
8 - Decent Work and Economic Growth
Decent Work and Economic Growth (SDG 8)
12 - Responsible Consumption and Production
Responsible Consumption and Production (SDG 12)
14 - Life Below Water
Life Below Water (SDG 14)
Directly impacted stakeholders
Gender inequality and/or marginalization
Smallholder farmers, serving commercial entities, benefitting from greater economic activities.
Planet
Environment with reduced losses of perishable products.
Corporates
Commercial farmers and the port of Walvis Bays benefitting from reduced losses and additional regional market opportunities.
Indirectly impacted stakeholders
People
Communities benefit from high quality and affordable agricultural products, and generally from increased economic activities thanks to the strengthened supply chains.
Public sector
Government of Namibia positioned as strategic actor for agricultural produce within the African Continental Free Trade Area (AfCFTA).
Outcome Risks

Cold structure infrastructure requires significant energy, which can strain the already limited grid capacities and generate negative environmental impacts if not managed and sourced sustainably.

Impact Risks

Competitiveness depends on expansion and strategic direction of the Walvis Bays port, which is steered by the Namibian Ports Authority (NamPort) and may limit the impact of the opportunity.

What

The outcome is likely to be positive, important and intended because cold storage port facilities are a critical component of logistics hubs and can position Namibia as a transshipment gateway.

Who

Commercial farmers benefitting from integration into regional value chains, and regional importers, exporters and retailers benefitting from high quality and affordable produce.

Risk

While the cold storage technology is readily available, the model's viability depends on cargo volume and the strategic direction of the Walvis Bays port, which is beyond control.

Impact Thesis

Position Namibia as a transshipment gateway providing high quality and affordable produce for Southern African Development Community (SADC) markets.

Policy Environment

Food and Nutrition Policy, 1995: Promotes the maintenance of strategic grain reserves by the private sector through a combination of storage alternatives at national, regional and farmer levels (13).

Food Safety Policy, 2014: Ensures food safety for all consumers, and provides sufficient food safety guarantees on all food products traded nationally or exported to other countries (14).

Financial Environment

Fiscal incentives: In 2020, the Ministry of Finance removed all fiscal incentives. The Ministry of Industrialization and Trade is negotiating for a new regime with the Ministry of Finance. The Investment Promotion and Development Board facilitates the conclusion of the incentives (20).

Regulatory Environment

Cold Storage Works and Abattoirs Proclamation, 1921: Guides the construction and operation of cold storage infrastructure and defines requirements also for export of produce (15).

Namibia Ports Authority Act, 1994: Provides for the establishment of the Namibian Ports Authority to undertake the management and control of ports (16).

Atmospheric Pollution Prevention Ordinance 11, 1976: Provides for the prevention of the pollution of the atmosphere, and for matters incidental thereto (17).

Private Sector

Investors such as the Development Bank of Namibia, the Namibian Industrial Development Agency (NIDA) and Agribank. Fund managers with a mandate in agribusiness and infrastructure, such as Musa Capital Namibia; Ino-Harith Capital; EOS Capital and Mergence Namibia Infrastructure Fund.

Government

Namibian Ports Authority (NPA), Namibian Ports Authority (NamPort), Ministry of Agriculture, Water and Land Reform, Namibian Agronomic Board (NAB).

Public-Private Partnership

Walvis Bay Corridor Group (WBCG) is a service and facilitation centre to promote the benefits of using the Walvis Bay corridors through the port of Walvis Bay to and from southern Africa (18).

country static map
semi-urban
Namibia: Erongo Region
Walvis Bay is the biggest commercial port in Namibia, serving as a strategic point of exit and entry for cargo overall and especially agricultural produce.
semi-urban
Namibia: ǁKaras Region
ǁKaras is a secondary priority region for cold storage port facilities, if the expansion of the port of Lüderitz goas ahead, which serves the mines in the southern regions of Namibia and north-western South Africa with imports and exports of mining commodities.
Sector Sources
  • I) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org/we-content/uploads/2019/06/SDGS_INDEX_REPORT_2019WEB.pdf. II) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. III) Martha Nangolo & Ndapwa Alweendo for Institute for Public Policy Research (IPPR), 2020, Democracy Report. Agriculture in Namibia: An Overview, https://ippr.org.na/wp-content/uploads/2020/02/Agriculture-in-Namibia-An-Overview.docx-10.pdf. IV) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals, Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. V) Republic of Namibia, National Planning Commission, 2018, Is Agricultural Productivity an engine for growth, https://www.npc.gov.na/?wpfb_dl=357. VI) DNA Economics, 2021, SAM Multiplier Analysis for the SDG study in Namibia, Six Capitals.
IOA Sources
  • 1) Port Economics, Management and Policy, 2020. Chapter 8.5 – Port Cold Chains, https://porteconomicsmanagement.org/pemp/contents/part8/port-cold-chains/#3_Reefer_Terminal_Facilities. 2) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. 3) Republic of Namibia, Ministry of Trade and Industry, Growth at Home, Namibia’s Execution Strategy for Industrialization, http://www.mti.gov.na/downloads/GrowthinNamibia.pdf. 4) FAO, 2016, Agroindustry Policy Brief 2, Developing the cold chain in the agri-food sector in sub-Saharan Africa, http://www.fao.org/3/a-i3950e.pdf. 5) Republic of Namibia, Namibia Statistics Agency, Namibia Census of Agriculture 2013/14, https://d3rp5jatom3eyn.cloudfront.net/cms/assets/documents/Namibia_Census_of_Agriculture_2013_14_Revised_Report.pdf. 6) The Research Department of the Bank of Namibia, 2017, 18th Annual Symposium: Feeding Namibia: Agricultural Productivity and Industrialisation, https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/52/52c35978-5912-4429-9052-3c8f5cc7971e.pdf. 7) EOS Capital, 2021, About EOS Capital, https://www.eoscapital.com.na. 8) Old Mutual, 2021, Investing in Infrastructure, https://www.oldmutual.com.na/old-mutual-investment-group/alternative-investments/midina. 9) Namibian Ports Authority (Namport), e-Newsletter, 5 March 2021, https://www.namport.com.na/news/907/Namport-e-Newsletter. 10) Namibian Ports Authority (Namport), 2021, Namport continues to be the preferred seaports in Africa, https://www.namport.com.na/news/907/Namport-e-Newsletter. 11) Monasa / UNDP interview with Meat Cooperation of Namibia Ltd for developing the Meatco Strategic Plan 2020-2025, 2019. 12) Development Bank of Namibia, 2020, Product Guide Sheet, https://www.dbn.com.na/phocadownload/DBN-Products-V2020.pdf. 13) National Food Security and Nutrition Council, 1995, Food and Nutrition Policy of Namibia, http://www.nafsan.org/wp-content/uploads/2020/08/National-Food-and-Nutrition-Policy-Namibia_1995.pdf. 14) Food Safety Policy, 2014, Republic of Namibia, https://www.atf.org.na/issues/article.php?blogID=27. 15) Cold Storage Works and Abattoirs Proclamation, 1921, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=12. 16) Namibia Ports Authority Act, 1994, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=199. 17) Atmospheric Pollution Prevention Ordinance 11, 1976, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=430. 18) Walvis Bay Corridor Group, 2021, Walvis Bay Corridor Group: About us, http://www.wbcg.com.na. 19) Monasa / UNDP interview with the Ministry of Industrialisation and Trade (MIT), 2020. 20) Monasa / UNDP interview with Ministry of Industrialization and Trade, 2021.