Seed Co International boosts regional expansion with US$7.24m FY26 capex

STAFF WRITER

Seed Co International Limited (SCIL), the regional seed-producing arm of Seed Co Group, has earmarked US$7.24 million in capital expenditure for the financial year ending March 31, 2026, signalling an aggressive push to reinforce its presence in key African markets while navigating volatile macroeconomic conditions.

The new allocation, slightly lower than the US$7.36 million spent in FY25 but higher than the US$5.8 million recorded in FY24, underscores the group’s continued commitment to scaling up infrastructure, research, and market penetration across its operating territories. SCIL runs operations in Zambia, Malawi, Tanzania, Kenya, Mozambique, Botswana, and Nigeria, while its Zimbabwean activities fall under the separately listed Seed Co Limited.

SCIL’s total assets climbed to US$155.92 million in the year ended March 31, 2025, up from US$142.93 million in FY24. The growth was largely driven by a 34% jump in the valuation of property, plant and equipment (PPE) to US$54.13 million, reflecting sustained investment in Zambia and Tanzania, coupled with group-wide asset revaluations that helped cushion depreciation and translation losses.

“Capital expenditure in Zambia and Tanzania continues to strengthen our production base, while groupwide PPE revaluations ensured the balance sheet remained solid despite macroeconomic headwinds,” said Seed Co Group chief executive officer Morgan Nzwere.

The company reported that for every dollar of short-term debt, it held US$1.95 in liquid assets, highlighting strong balance sheet resilience at a time when many regional agribusinesses are battling liquidity pressures and rising borrowing costs.

SCIL’s financial results come against a backdrop of currency volatility, inflationary pressures, and climate change risks affecting African agriculture. However, Nzwere said the group’s diversified geographic presence and adaptive research pipeline give it an edge.

“The group remains well-positioned to navigate a challenging macroeconomic environment marked by currency depreciation, inflationary pressures and the ongoing impacts of climate change,” he said. “Leveraging proprietary seed technology adapted for diverse climatic conditions, alongside a trusted brand cultivated over 85 years, we are well set to capitalise on emerging opportunities across our markets.”

The firm’s research and development (R&D) pipeline continues to be its backbone, generating valuable intellectual property while underpinning an environmental, social and governance (ESG)-led innovation strategy. This is particularly critical as food security gains traction across Africa’s policy agenda, creating demand for improved and climate-resilient seed varieties.

For the year to March 2025, SCIL achieved 5% revenue growth to US$124.3 million, despite sales volumes being constrained by stockouts and political unrest in Mozambique following elections last October. Management said a more favourable product mix and better trading conditions in Mozambique partially offset the decline.

In addition, finance costs fell sharply by 42.3%, boosting profitability. SCIL posted a profit after tax of US$5.7 million, up from US$4.9 million in FY24.

“This performance demonstrates operational resilience in the face of adverse conditions,” Nzwere said.

Looking ahead, SCIL is betting on political cycles and rising food security concerns to fuel demand. In Malawi and Tanzania, upcoming elections are expected to stimulate seed purchases as governments typically expand agricultural support programmes during campaign periods.

Elsewhere, the group is actively scaling operations in Ethiopia, while demand growth in Angola, the Democratic Republic of Congo (DRC), and the broader Lakes Region continues to build momentum.

“Key growth drivers include rising focus on food security, improved seed stock availability, and better trading conditions in Mozambique,” Nzwere noted. “Increasing volumes in Angola, the DRC and the broader Lakes Region also signal continued market expansion.”

To safeguard against volatility, SCIL has deliberately reduced foreign exchange risk by turning to localised borrowings across its markets. The group has also diversified seed production geographically, a move aimed at cushioning climate-related supply shocks. Direct cash sales through its own retail outlets are also on the rise, improving margins and reducing dependency on third-party distributors.

Analysts say SCIL’s strategy reflects the shifting dynamics of agribusiness in Africa, where multinational seed firms must increasingly balance profitability with food security imperatives. With climate change reshaping weather patterns, regional players like SCIL are investing in adaptive research and wider distribution networks to stay ahead.

The group’s ability to sustain profit growth, maintain a strong liquidity ratio, and expand regionally positions it as a key player in the continent’s agricultural transformation agenda. Its dual listing structure — with Seed Co Limited in Zimbabwe and SCIL representing ex-Zimbabwe operations — gives the group flexibility to tap into different capital markets and investor pools.

While SCIL’s FY26 capex target is slightly lower than last year, the company’s disciplined capital allocation reflects a cautious but determined strategy to consolidate gains in core markets while cautiously testing new frontiers. By strengthening operations in politically stable zones like Zambia and Tanzania while maintaining exposure to higher-risk but high-return markets like Mozambique and the DRC, SCIL is striking a balance between defensive positioning and growth orientation.

“Operational resilience is further supported by reduced forex risk, climate mitigation strategies, and expanding direct sales channels,” Nzwere emphasised. “We remain confident in delivering sustainable growth and value creation through disciplined execution, market responsiveness and continued investment in innovation and regional integration.”

As Africa faces escalating food security challenges, SCIL’s investments in research-driven, climate-adapted seed technology place it at the heart of a critical sector. Its steady revenue growth, stronger balance sheet, and expansion across high-potential regional ma ,rkets underline its long-term growth prospects.

The US$7.24 million capex plan for FY26 is therefore more than a routine expenditure line — it represents SCIL’s bet on Africa’s agricultural future, where demand for improved seed varieties is expected to surge in tandem with population growth and government-backed farming programmes.