“We planned. These interventions are not accidental. We negotiated and Ethiopian Airways was able to consider our seriousness in terms of performance,” Brian Dioka, the Chief Operations Officer of Botswana Meat Commission (BMC) said on Wednesday as the organisation announced an exhilarating voyage with Ethiopian Airways for the transportation of beef products across its route network.
It’s a visionary leap towards revolutionising its distribution network as it soars to new heights of market accessibility. BMC embarked on a historic journey, ferrying its products by air for the first time, with a sample shipment courageously making its way to Senegal in December. This strategic alliance not only marks a milestone but also reflects BMC’s commitment to its objectives outlined in its Meriting 2022-2025 Strategy.
By leveraging Ethiopian Airlines’ extensive air routes and efficient cargo transportation services, BMC believes it is poised to strengthen its supply chain capabilities and optimise its export processes. With Ethiopian Airlines as the air freight partner, BMC said it can now ensure timely and reliable delivery of its premium meat products to key markets across the globe – and similarly receive payment of supplies, which is intended to ensure quicker settlement of creditors (i.e. cattle producers).
Dioka highlighted the significant advantage of ferrying beef by air, emphasising that it takes only 48 hours. This rapid transportation allows customers who pay cash upon meat receipt to do so much faster, ideally within 5 days. Dioka expressed confidence that this expedited process will enable BMC to receive payments sooner, thereby enhancing cash flow.
BMC has historically ferried its beef by ships from its Cape Town office and took around 28 days to reach the intended destination, factoring in delays, clearances, and payment processing. It took BMC approximately 45 to 60 days to receive payment, accounting for waiting periods, said CFO Mmabasotho Tibe.
Dioka and Tibe acknowledged that boats require a large number of containers and can carry a substantial load. Using boats allows BMC to transport up to 15 containers despite delayed arrival time that extends to 60 days. There are occasions when the product movement is hindered due to full boat capacities, which BMC cannot control. To ship by sea, BMC must purchase space which is never guaranteed. Tibe mentioned that they are currently discussing with one of their distributors from Greece to facilitate direct product procurement from Lobatse. She said this initiative is still in the conceptualisation stage.
In contrast, planes transport only one container at a time. However, the advantage lies in the frequency of trips made by planes within the same 28-day period.
Tibe disclosed that the agreement with Ethiopian Airways stipulates that dedicated cargo services would be provided as the need arises. For example, if BMC wishes to transport 5 containers per week, Ethiopian Airways will accommodate this request. BMC will assess the required capacities accordingly.
Distribution doesn’t exist in a vacuum. Hence Dioka said BMC requires a recipient on the receiving end of the market. He noted that they established a presence in the UAE in March last year, and by December, they were already shipping products. BMC identified customers who appreciated their products. Tibe said this indicates a level of certainty as they collaborate with Ethiopian Airways.
“As we engage with Ethiopian Airways, it also has an off-taker who is willing to pay prices. We are still trying to find price comforts. We haven’t reached a space where we can come out and say the price is this. We have to market develop,” Dioka added.
What’s encouraging is that Dioka believes their presence in the UAE provides them with an alternative and reduces dependence on the European Union (EU.
“Diversification of markets is being realised in the UAE. The diversification was also not accidental. It is there in the strategy to say let’s diversify from the EU and open other markets.”
The EU has stringent requirements concerning food hygiene, traceability, and safety. Consequently, Dioka said products that do not meet EU standards are directed towards the UAE.
He believes that this move could potentially raise prices for non-EU communal cattle. Currently, he said BMC offers the highest prices for EU cattle in the region. BMC aims to replicate this effect for non-EU communal cattle and become a more favorable buyer for farmers who do not qualify for EU standards. This diversification of markets is beneficial for farmers with substantial livestock holdings, as over 80 percent of Botswana’s cattle are owned by communal farmers, according to Dioka.
“BMC is actively creating a market for them.”
As it exports, BMC said it is focusing on enhancing the brand aesthetics of its products to ensure they are highly distinctive. Dioka believes they have the best beef globally in terms of differentiation. He considers factors such as the type, flavor, and traceability of the product, along with the compliance framework of processing facilities.
As it ventures into new markets, BMC endeavors to package products in a way that allows it to maintain its pricing structure and enter these markets with competitive prices. This aligns with its strategy to promote Botswana beef as a premium brand. He hopes that even private entities can help protect this intellectual property.
“Our products are free from hormones, which further underscores the importance of top-quality packaging. These efforts represent ongoing initiatives as we progress through the mid-term of our strategy implementation.”
The COO said they have noticed that some South African entities are marketing their products as “Botswana beef,” which undermines BMC’s competitive advantage as producers of premium, hormone-free products. He warned that this poses a threat to intellectual property and creates confusion in their global efforts. However, he said they are determined to compete vigorously, even in the absence of live exports.
