Investors keen to set up charcoal plant to add value to “black gold”

WINDHOEK - In line with the Minister of Industrialisation, Trade and SME Development, Tjekero Tweya's recent observation that the charcoal industry must be reformed to add more value locally, AM Consulting in Windhoek say they have investors who are looking for a farm of between 5 000 to 10 000 hectares and whose owner is interested in de-bushing/bush thinning. The investor's intent is to set up a charcoal production plant on such a farm as too much charcoal in bulk is exported to South Africa where it is processed and packed before it is exported to the European market.

Two officials of DHG, the biggest European importers of Namibian charcoal, recently visited the Namibian Charcoal Association (NCA) in Otjiwarongo to familiarise themselves with the local production methods. The NCA has 697 registered members.

AM Consulting has now attracted investors and they will pay the farmer a percentage of the operational income made. Wood will be obtained from the farm but also bought from other farms.

Annegret Museler of AM Consulting informs that the owner of such land does not need to be involved in the production or the business itself. Shareholding options are available but will require a purchase.

The area should be located in the central to northern areas, relatively close to a main road for transport purposes.

The minister personally visited some of the biggest charcoal processors in SA and was hopeful that they will bring their expertise and their processing plants to Namibia. Plans are underway to erect charcoal processing plants in Omaheke, Otjozondjupa and Erongo regions. From there, the processed charcoal will be transported with TransNamib via railway to Walvis Bay and then be shipped to export markets. Government sees charcoal production and exports as one of the manufacturing industries in Namibia which have the biggest potential to bring about economic growth and employment creation.

He also cautioned the industry to support local SMEs where possible when supplying packing material and not to import products which can be manufactured locally. The industry is one of the biggest job creators in the agricultural sector.

One of the main aims of the NCA is to promote the production of Forest Stewardship Council (FSC) certified charcoal among its members and the localisation of these standards is key to meet the requirements for a more socially, economically and ecologically sound product. The standards are aligned with the (FSC) and the establishment of national standards serves to tailor the FSC standards to Namibia's circumstances. Meeting FSC standards is a requirement for exporting to European markets. This is important for Namibia because of the nine export markets for its charcoal, these are largely based in Europe (including the UK, Germany, France, Portugal and Greece).

Government has identified charcoal production as one of the important export industries through which economic growth and employment creation can be brought about in Namibia. Currently, Namibia is the 5th largest charcoal producer in the world. Even though they are grateful that the 13 Namibian charcoal processors which add value in Namibia by processing and packing locally, the minister is of the opinion that too much charcoal is exported to SA in raw unprocessed form.

Charcoal production is an important activity for managing bush encroachment in Namibia. With an estimated 160,000 tonnes of export volume in 2016, the country is currently ranked as the fifth largest exporter of wood charcoal in the world which also makes it the largest exporter of charcoal in the Southern African region. This steady increase in demand and supply for Namibia's charcoal in various markets has led to the charcoal industry being identified for strategic development through the National Development Plan (NDP5) and especially as one of the 10 industries in the Ministry of Industrialisation, Trade and SME Development (MITSMED) Growth at Home strategy to accelerate the country's economic advancement. Considering different and connected factors such as current market demand and the industry's ability to respond to such demand, it is estimated that Namibian charcoal exports could increase to 200,000 tonnes by 2020.

This is good news for sustainable rangeland management in Namibia as the country's farmland is burdened by a massive encroachment of bush species which, to name a few, has reduced agricultural productivity due to the lands reduced carrying capacity, resulted in water constraints from high extraction of groundwater by encroaching bush, reduced biodiversity of species and created challenges for large predator conservation efforts.

Charcoal production has existed as an industry in Namibia for approximately 30 years and operates mainly on farms in the central and northern regions.

Source: New Era Newspaper Namibia