LIVINGSTONE MARUFU
Listed agro-processing firm, National Foods Limited (Natfoods) says it has set a target to procure 240 000 tonnes of maize from local farmers following a good 2020/2021 summer cropping season, a move which cuts the company’s import bill.
“On the back of this harvest, Natfoods expects to source all of its maize requirements locally over the coming 12 months,” company secretary, Leigh Howes, said in a statement accompanying the firm’s trading update.
Natfoods has been using close to US$50m on maize imports yearly and securing the grain has been a big challenge for the company.
Howes said the maize division has had a difficult year due to the substantial volumes of maize meal imports from South Africa, particularly into the south of the country.
“These imports have subdued volume performance and impacted margins,” Howes said.
Volumes for the year increased 14,2% to 395 000 tonnes during the period under review.
During the quarter, volumes decreased by 2.4% to 131 000 tonnes.
Volumes at the flour division grew by 46% on a year to date basis and demand has recovered in the category, assisted by support from the foreign currency auction.
Stockfeed volumes increased by 27% driven by increased demand for protein products, notably in the poultry segment.
The most recent quarter saw growth slowing as demand for beef feed declined on the back of improved pastures.
The groceries division sustained its growth trend, with year to date volume growth of 95%, driven largely by rice and salt.
The snacks and treats unit saw volume increase of 44% for the year to date.
“This result was encouraging in view of the fact that the Covid-19- elated movement restrictions has dampened demand in these categories,” Howes said.
Howes said liquidity in Zimbabwe dollar terms remained constrained, necessitating precise management of working capital models, particularly over the seasonal peak demand period (December – March).
The company is excited by the offering of loans in US$ by the banking sector.
He said early indications point to a much improved wheat harvest based on improved dam levels, better preparation and substantially reduced power outages.
The 2021 local wheat will be delivered in October/November, and wheat imports will be required until this point to supplement the remaining stock from the 2020 harvest.
National Foods will support local wheat contract farming, targeting 5 300 hectares.
On the outlook, the improved harvest is expected to drive further improvements in consumer spending power.
Natfoods expects the improved harvest to result in sustained volume momentum in all categories with the exception of maize, where it is expected volumes will be impacted by increased retention at a household level.
