King Charcoal to expand
30 December 2020 | Business
Lilo Niilenge; Former Councillor, “This project will underscore government’s initiative of value addition to Namibian products. . .”
The previous Walvis Bay municipal council decided that an additional two hectares of Farm 38 can be leased to King Charcoal Namibia for the purpose of establishing a charcoal bagging and briquette manufacturing plant.
The former chairperson of the management committee councillor Lilo Niilenge said at a meeting held it was decided that one hectare of Farm 38 be leased by private transaction to the company for N$5 000 plus N$750 (15% VAT) per month, escalating with 10% per annum for production and packaging of charcoal.
“King Charcoal has now applied for additional land on their current lease at Farm 38 to establish a charcoal bagging and briquette manufacturing plant. They requested the original lease be extended from 10 to 20 years with an option to renew for a further period of 20 years.”
The company has already done earthworks and construction of their leased site and is fully operational from the new factory on Farm 38, but would like to expand the business.
“Currently they are exporting raw charcoal products in bulk without adding potential to the product. Value adding is mainly confined to bagging charcoal directly for foreign retailers in their branded craft paper bags and briquette manufacturing from the smaller charcoal fractions.”
Niilenge said the applicant aspires to do both these activities on Farm 38 and that the estimated capital required for the project is more than N$20 000 000.
“Therefore, the applicant is requesting a longer lease period to substantiate the capital investment to be made.”
King Charcoal already has 50 permanent jobs at their factory and 400 farmworkers that indirectly derive an income from the company’s operations, but this expansion in their business will employ at least 30 Namibians.
The current rental for King Charcoal is N$5 500 plus N$825 (15% VAT). The lease of two hectares of Farm 38 should be set at a monthly rental of N$11 000 (0.55c per m²) plus N$1 650 (15% VAT), as it is in line with their current rental fee.
“This project will further underscore government’s initiative of value addition to Namibian products and ultimately result in skills transfer to Namibians.”
Since council supports the expansion although there are various requirements that need to be satisfied. These include that no unauthorized structures, or structures not approved in terms of the provisions of the Standard Building Regulations are allowed on the site and the applicant, prior to the erection of any structures on site, shall obtain the approval from the general manager: roads and building control.
A refundable, non-interest deposit of N$10 000 must be paid by the applicant on the date of signing the lease agreement, to cover the costs of rehabilitation of the site should the applicant fail to do so.
King Charcoal should also provide all services and enclose the leased area at own cost.