Markets
“Tomatoes are our biggest product, but we cannot export these to Europe, it would take too long. We export some tomatoes and green peppers to South Africa, but not to other African countries,” he continues. The Namibian vegetable market is growing considerably, according to him. “We have established some very good retail markets. We like to put our eggs in various baskets, to spread the risk.”
Albert and Nico van der Merwe
“The UK is our largest market. The Brexit has already had an enormous impact on the currency difference between the Euro and the Pound, and I think we have not yet seen the end of that. We export about 70 per cent to the UK, 20 per cent to the EU and about 10 per cent to eastern countries. Whatever happens in March, whether it will be a soft or a hard Brexit, it will be a determining factor for our export. The UK has much potential for us in the long term, but in the short term, it will become difficult.”
Grapes have been a focus product for the Namibian government. “We are working closely together with the government to get direct access to China. More volume is coming from Namibia, growth potential could double within the next 10 or 15 years. We also continue to explore new markets. For example, we are sending an increasing volume to Canada, the exchange rate makes it an attractive market for us.”
A view of the Sonop vineyards
Drought and infrastructure
“We believe we are nearing the end of a very long drought and we are positive about the fact that every year we learn how to adabt and mange climate change. However, the quality of the water is declining. We are now irrigating our fields with water with high alkaline levels. This definitely has an effect on our yields,” explains Albert van der Merwe, Nico's brother. Currently Sonop, situated in Noordoewer, does not have an electricity problem like the companies in the Aussenkehr valley. “We have enough surplus power for an extension of 1,000 hectares. The challenge, however, is that the Namibian government does not sell its land, they prefer to lease it to the farmers.”
“To export our product we must first truck it all to Cape Town, 700 kilometres away. The port of Luderitz on Namibia's west coast is much closer for us than Cape Town. But there is still a lot of work to be done to make this a permanent solution and it will require some skill and a huge amount of capital. If we were to use the port of Walvis Bay for our export, we could be on the market with our products at least three days earlier, but the road is about double in kilometers than the current route to Cape Town. However, there might be an option to use the railway from Grunau, but trial and error will have the final say. This would allow for a lot of growth potential.”
The labour situation in Namibia is positive. “The labour age has dropped significantly in the past five years, so we now have many young labourers, but they require a lot of training. Most of our workers come from the north, and they are used to the more traditional crops, such as wheat and mahangu. But we are lucky enough to get between 60 and 70 per cent of our labourers back every year. We have about 150 permanent workers and 500 seasonal workers at the farm.”
The Sonop offices at the Noordoewer, Namibia
Avocados
“We are starting an avocado trial in February. The flowering stage is very important for avocados, but we believe we have very good temperatures during that stage, it will be the perfect climate for flowering. It will take three to five years at least, before the avocado trees are at optimum productivity. But when they are, we will be able to harvest at least 10 or 11 months of the year, it also means we will be able to employ people 12 months of the year,” explains Nico.
“In the UK, avocado consumption has grown by about 36 per cent, but only about a third of the UK population are now consuming them. So that is a huge potential market. It is also a fast-growing commodity in Namibia. There is a huge gap on the domestic market from January to July. Right now, all of the avocados consumed locally, are imported, so that could be a huge advantage to us.”
Challenges
“Our biggest challenge is adapting to climate change. This is a continually changing process and we need to create a tool to manage the unchangeable. Logistics are becoming an increased challenge for us as our closest market is 700km away. Road freight is becoming more expensive and the payload is essential. Inflation, exchange rate, increased operating cost and fluctuating fuel prices plays the biggest role in this increase. For export we could use the railroad, which will be a trial for 2017, our product can be in Walvis Bay within 24 hours. This would also allow us to save on cross border costs, cross border delays and it the total road freight will be 150km instead of 700km.”
For more information:
Nico van der Merwe
Sonop Farms
Tel: +264 63297244
Email: Nico@sonop.com.na