Anxiety grips Dairibord
CLOUDINE MATOLA
Mercy Ndoro, the group CEO of the largest milk processor in Zimbabwe, Dairibord Zimbabwe Limited, has issued a warning that the adverse impact of El Nino, crippling power cuts and water scarcity, could have a detrimental effect on milk production.
Additionally, Ndoro stated that the rising cost of stockfeed is likely to result in the decline in milk yield per cow. This could impact the supply of raw milk, she said.
“Due to the impact of the El-Nino induced drought which has turned out to be more severe than initially envisaged, it is expected that it will significantly hamper maize production, forcing a greater dependence on imports to meet the demand of this essential commodity,” Ndoro said.
She went on saying: “Stockfeed prices are expected to surge and, in turn, milk yield per cow is expected to decrease, ultimately impacting both raw milk production and its price. Raw material supply will also be affected.”
Furthermore, Ndoro stated that severe water shortages and power shortages brought on by El Nino are anticipated to raise utility costs and reduce output.
But even with all of the headwinds the company is battling, Ndoro is optimistic about Dairibord’s prospects.
“Despite an operating environment that remains uncertain, Dairibord is optimistic about its growth prospects.
“The group will focus on raw milk supply growth, enhancement of production capacity for consistent product supply to meet market demand, continuous route to market optimisation and effective pricing models, innovations and venturing into new categories to grow product portfolio, grow exports for volume growth and foreign currency generation and cost containment and reduction,” Ndoro said.
In its financial results for the 12 months to December 31, 2023, Dairibord’s profit dropped to ZW$6.9bn from ZW$13.6bn reported in the previous year, largely due to ZW$36.3bn in foreign currency losses and a total of ZW$$69bn net interest expenses.
Revenue for the group, however, grew by 47% to ZW$724.12bn in the period under review from ZW$490.95bn reported in 2022.
Earnings before interest and tax depreciation and amortisation (EBITDA) grew to ZW$82.72bn for the year to December 31 2023 from ZW$55.57bn reported in the previous year.
The company’s board chairman Josphat Sachikonye said the group was pursuing a lean and agile cost structure ensuring sustained profitability and long-term value creation for their stakeholders.
He added that the company would continue to look for ways to expand both locally and regionally.
“The Group is well-positioned to capitalise on emerging opportunities. As part of its growth strategy, the organisation will continue to explore avenues for expansion, both domestically and regionally, while ensuring a sustainable and responsible approach to business operations,” Sachikonye said.
