NatFoods invests US$2,5m in plant

Breakfast cereals division to diversify product portfolio with instant porridge

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LIVINGSTONE MARUFU

FOOD manufacturing concern, National Foods, has invested US$2.5
million into a cereal plant which will see the firm producing breakfast cereals as the company diversifies its product range.

The development comes after the company carried out an intensive research for three years to begin its instant porridge product.

National Foods chief executive Mike Lashbrook told Business Times that the instant breakfast cereals will be marketed under the Pearlenta Nutri-Active brand. “National Foods has invested in world-class, state-of-the-art equipment worth US$2.5 million for the manufacture of breakfast cereals and soon will be launching their four flavours of instant porridge (original, strawberry, chocolate and peanut butter),” Lashbrook said.

“The plant was secured from the leading suppliers of equipment, Buhler of Switzerland. The plant is highly automated in line with the 21st century and the digital world. The staff also underwent training with Buhler to produce a perfect product.”

This is the first time National Foods has diversified into breakfast cereals after nearly 100 years of only specialising in the traditional maize meal category marketed under the brands Red Seal and Pearlenta.

The product will be distributed through the normal channels such as the retail chains, wholesalers and general trade, Lashbrook said. National Foods said the cereals plant will join other country initiative programmes on government import substitution programmes since most breakfast cereals on the market are imported from South Africa.

Zimbabwe spends US$2.5m monthly on breakfast cereals imports. The company is looking up to the government for an incubation period through some form of protection from the well-established multinationals such as Kellogs in an effort to make an impact on the local market.

In its full financial results for the full year ended June 30, Natfoods recorded a solid performance for the period on the back of a 12.5 percent
increase in total volumes to 611 000 tonnes.

This volume growth was driven by an excellent performance by the maize division, where volumes grew by 60 percent over the comparative year to
196 000 tonnes. Meanwhile, Stockfeeds Division benefitted from the country’s recovery from Avian Influenza and delivered a 42 percent volume growth over the previous financial year.

Smaller volume gains were also recorded in the FMCG and Snacks and Treats Divisions. These volume gains were somewhat offset, however, by the performance of the Flour Division, where volumes reduced by 18 percent to 249 000 tonnes due to constrained wheat availability and a restricted bread price that did not permit the company to take positions in imported wheat to close the local supply gap.

The company’s working capital model continued to evolve appreciably during the period, as the inflationary environment demanded an extended raw material pipeline, whilst creditor funding, especially for key imported raw materials, progressively reduced.