Dairibord hits five year sales volumes record
LETTICIA MAGOMBO
Zimbabwe’s milk processor, Dairibord Holdings posted a 48% sales volume increase in the 12 months to December 31, 2022, to ZWL$13bn from ZWL$8bn on the back of growth in beverages segment, board chairman Josphat Sachikonye has said.
“…(This is) the highest volume recorded in the last five years. Liquid milks grew by 10% while foods grew by 34% . Beverages recorded a significant 84% increase due to growth in volumes of Pfuko and Cascade. About 20% of the volume was sold in foreign currency up from 16% in 2020,” Sachikonye said.
Profit for the group stood at ZWL$ 61m from a loss of ZWL$123m reported in the previous year.
Sachikonye also said th ere was also 1% growth in raw milk processed in comparison to the previous financial year.
He said increase in sales volumes resulted in a 55% revenue growth for the period under review to ZWL$13.1bn from ZW$8.4bn reported in the previous year.
The business attributed this to a more stable operating environment, dual currency and access to foreign currency through the auction system, an improved ability to source raw materials and invest in retooling.
Despite the growth, the company faced difficulties in meeting consumer demands due to the prevailing Covid-19 pandemic which caused production capacity constraints.
“Some negative impacts, such as longer lead times across supply chains, long delays in disbursement from the foreign auction system, increased labour and utility costs as well as increased Covid-19 mitigation costs, resulted in mounting pressure on costs and margins,” Sachikonye said.
Cost of sales increased by 50% driven by depreciation of the currency, increased commodity prices, petroleum-based packaging materials, milk powders and freight costs.
In its outlook the group had a pessimistic perception of the future citing the erosion of consumer disposable incomes due to escalating inflation and exchange rate disparities as well as the geopolitical effects resulting from the Russian-Ukraine war.
However, it remained optimistic that the Reserve Bank of Zimbabwe will continue to maintain a tight monetary policy and improve the foreign auction system while fiscal policy will remain aligned with the goals of the National Development Strategy 1.
