Dairibord committed to support farmers

TENDAI BHEBE IN BULAWAYO 

 

Zimbabwe’s largest milk processor, Dairibord Holdings Limited says it is committed to offering support to local farmers to grow milk supply through actively promoting lower-cost operating models.

The development, the company’s board chairman Josphat Sachikonye said, would reduce the company’s dependence on imported milk powders and the associated foreign currency requirement.

“The group remains committed to supporting local farmers to grow milk supply through actively promoting lower-cost operating models in a bid to bring prices back to regional parity in the medium term.

“The long term benefits of increased raw milk production will reduce the dependence on imported milk powders and the associated foreign currency requirement,” Sachikonye said.

Zimbabwe is battling foreign currency shortages.

Although the Reserve Bank of Zimbabwe introduced a weekly foreign currency auction system, companies have indicated they are battling to access adequate hard currency needed for the importation of critical raw materials and equipment.

The situation has been worsened by the central bank taking at least two months to release the allotted cash. The proposal by Dairibord comes at a time raw milk utilisation has increased by a paltry 1% in the six months to June 30, above the prior year.

National milk production went down by 2% during the period under review. Revenue for the group grew 65% to ZWL$4.2bn in the six months to June 30, 2021 from ZWL$2.5bn reported in the prior comparative period.

The solid revenue performance was a result of the 54.5% increase in sales volumes and moderate price adjustments to minimise margin compression.

Sachikonye said the focus on the generation of foreign currency revenues continued during the reviewed period, resulting in a 141% increase over the same period in the prior year.

He said foreign currency revenues accounted for 15% of total revenue up from 9% in the prior year and contributed significantly towards meeting the import bill.

Sachikonye said demand was firm across all product categories.

Sales volumes for the period were 54.5% above the prior year, the highest H1 volume performance in the last 5 years.

Liquid milks, foods and beverages volumes increased by 22%, 52%, and 87% respectively compared to the same period last year.

Despite the growth, demand still exceeds supply across the product portfolio, particularly in the liquid milks category which is constrained by raw milk supply challenges.

However, Dairibord Holdings’s loss widened to ZWL$180m in the reviewed period from ZWL$989 000 in the same period last year.

Total assets for the group stood at ZWL$3.646bn from ZWL$3.616bn reported in the prior comparative period.

Foreign currency liabilities at the end of the period were adequately covered by foreign currency denominated assets (debtors and cash) and expected disbursements from the foreign currency auction market, he said.

 

 

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