Policy uncertainty choking business: Innscor

CLOUDINE MATOLA

Innscor Africa Limited, a publicly traded conglomerate, has issued a stark warning that policy uncertainty and inconsistent regulations are eroding business confidence and stifling long-term investment in Zimbabwe.

While the company sees potential for economic growth, Innscor board chairman Addington Chinake stressed that without predictable and market driven policies, businesses  face serious challenges in capital allocation and long-term planning.

“The group remains guardedly optimistic about the medium- to long-term prospects of the economy. However, for businesses to thrive, authorities must pursue a policy framework that is consistent, transparent, and conducive to market-driven outcomes. This will enable companies to make better-informed capital allocation decisions and drive long-term economic stability,” Chinake stated.

A major challenge highlighted by Innscor is the recent shift in Value Added Tax (VAT) policy, which has disproportionately impacted the protein segment.

Finance Minister Mthuli Ncube’s decision to reclassify protein products from an “Exempt” status to a “Standard-Rated” status has led to unintended market distortions.

Chinake warned that this policy shift is favoring non-compliant and unregistered competitors, putting formal, tax-paying protein producers at a severe disadvantage. The increased tax burden on compliant producers has artificially skewed the playing field, potentially undermining food security and formal employment in the sector.

“The VAT policy shift has had severe unintended consequences, with compliant producers struggling to compete against unregistered, tax-evading players. This distortion risks crowding out formal manufacturers, weakening the supply chain, and reducing overall market stability. We strongly urge authorities to review and correct these imbalances to ensure a sustainable and competitive protein market,” Chinake said.

Without urgent policy adjustments, Innscor warns that the formal protein industry could shrink, leading to higher food prices, reduced local production, and increased reliance on informal suppliers with lower compliance standards.

Despite operating in an increasingly challenging economic landscape, Innscor has demonstrated remarkable resilience, achieving solid volume growth across its entire portfolio. The company’s ability to generate strong cash flows, maintain profitability, and expand market share highlights its strategic agility in a volatile environment.

“The past year presented extraordinary challenges, but our diversified portfolio allowed us to mitigate risks and maintain profitability. Strong volume growth across key segments was crucial in driving overall earnings. We remain firmly positioned for sustainable long-term growth, despite ongoing market volatility,” Chinake noted.

This resilience is largely attributed to the significant investments Innscor has made between 2021 and 2024, which have expanded manufacturing capacity, enhanced product offerings, and improved operational efficiencies.

Innscor’s financial results for 2024 reflect broad-based growth, reinforcing its ability to navigate economic headwinds while delivering shareholder value.

Revenue for the group increased by 13.2% to US$910.065m, driven primarily by volume growth across all business segments.

Net profit surged by 35% to US$65.188m, reflecting strong operational efficiencies and market expansion.

The Mill-Bake segment rebounded strongly, significantly contributing to the group’s overall growth.

The Beverage and Light Manufacturing divisions expanded market share, supported by higher capacity utilization and increased demand.

The Protein segment managed to maintain marginal volume growth, despite VAT policy challenges.

“Positive volume growth was recorded across all core business units, with particularly strong performance in the Mill-Bake and Beverage segments. Our continued investment in capacity expansion and innovation has been instrumental in driving growth and positioning the company for sustained future success,” Chinake explained.

These results underscore Innscor’s strategic focus on operational efficiency, market expansion, and product diversification, which have helped cushion the company from external economic shocks.

Innscor’s plea for clearer, more predictable policies aligns with broader concerns across Zimbabwe’s business sector. The private sector has long faced regulatory volatility, making long-term planning and investment difficult.

The Group is urging policymakers to prioritise stable tax policies, by ensuring that tax reforms do not unfairly disadvantage formal businesses while allowing non-compliant competitors to thrive.

In addition, Innscor  is encouraging a level playing field that fosters competition and business sustainability as well as creating a regulatory framework that attracts long-term capital investment, supports industrial expansion, and stimulates job creation.

For Zimbabwe to unlock its economic potential, authorities must reduce policy uncertainty, foster investor confidence, and promote market-driven growth strategies. Innscor and other leading businesses are ready to invest and expand, but require a stable regulatory foundation to do so effectively.

Looking ahead, Innscor remains guardedly optimistic, balancing its growth ambitions with a cautious approach to policy-driven risks. The company is committed to expanding its operations, but recognizes that policy clarity will be a determining factor in future investment decisions.

“We see significant growth opportunities in Zimbabwe’s economy, but only if market conditions remain conducive to business expansion. Our focus remains on strategic investment, operational efficiency, and shareholder value creation—but we urge authorities to provide the regulatory consistency needed for long-term business confidence,” Chinake stated.

As Innscor continues to engage policymakers on pressing regulatory concerns, the company remains committed to innovation, expansion, and delivering sustained value to shareholders, employees, and consumers alike.