LIVINGSTONE MARUFU
Listed seed producer, Seed Co Zimbabwe says its key focus will be to preserve value in an inflationary environment.
“(This will be done) through good opening stocks and early processing owing to artificial dryers, expanding open market direct and direct reach to create sustainable business, opening own selling depots for direct cash sales and renegotiating distribution agreements to ensure we earn and collect real value from the sale of our products,” Seed Co group CEO Morgan Nzwere said.
“Winter cereal sales are encouraging hard currency denominated revenue and leveraging continental associates to exploit export opportunities.”
Nzwere said there was a need to reconfigure the distribution model to manage commissions to viable levels for the company to recover in regional markets.
“We can increase production as a way to have more control of cost of sales and product availability, localise borrowings to manage exchange losses, convert revenue to quickly to stocks and other inputs to lock value and leverage COMESA and SADC movement of goods protocols to move stock where it is needed to recover from the current subdued performance,” he said.
“(It’s critical to) harness the opportunity in Mozambique for long term sustainability, explore new markets in West, Central, East and North Africa and new products such as rice and potato.”
Nzwere said there is also a need to continue the development of partner activities in Mozambique to help mitigate government budgetary constraints.
In its financial report for the year to March 31, 2022, Seed Co swung into a loss position of ZWL$650.5m from a profit of ZWL$1.4bn reported in the prior comparative period due to economic meltdown.
Revenue for the group shrunk 8% to ZWL$9.3bn from ZWL$10.1bn achieved in the prior comparable period.
The flagship maize seeds volumes dropped by 23% in the reported period with wheat sales volumes and soya beans also dropping by 6% and 31% respectively all attributed to erratic rains and pricing challenges.
Inventories at ZWL$3.3bn were higher than ZWL$2.7bn recorded in the year prior because of the larger volumes of wheat seed held at year end in preparation for the winter cropping season and the unsold maize seed stock carried over into the next trading year.
The rise in property, plant and equipment to ZWL$6.3bn from ZWL$4.7bn in the year prior was driven by new acquisitions during the year under review.
Seed Co also reported that season production for the 2022/23 now at intake stage challenged by higher costs of inputs but expected to be higher than prior year
Nzwere is pessimistic and anticipates the current economic environment to drag on into 2023 harmonised elections.
