National Foods feels competition pinch: Maize milling division volumes drop

NATIONAL Foods says its maize milling division has recorded a 28 percent decline in volumes due to increased competition on the local market.

In its financial statement for the half year ended December 31, 2016, the agro-processing firm said the increased scale of Government supported supplies of subsidised maize substantially dampened demand for maize meal.

“The maize division had a very challenging period with volumes 28 percent below last year . . . In addition, millers competed aggressively on price for the diminished market, which caused a material reduction in margins.

“Consequently, the business registered a $1,5 million loss before tax in the six-month period ended December 31, 2016,” it said.

The group said regional availability of maize remained tight and is expected to continue until the next harvest season, which is expected to start next month.

It said the next harvest looks promising locally as well as across the region following the excellent rains received.

During the period under review, National Foods said its revenue declined by 3,5 percent compared to the previous period while difficulties in the maize business and general pricing restraint led to gross margin reducing by 9,3 percent.

The group’s financial position remained healthy with net borrowings of $1,8 million as at December 31, 2016.

“Net working capital closed the year at $48,83 million versus $46,25 million for the prior year. As is normally the case at this time of the year, the group elected to carry stocks of certain key raw materials at the close of the period.

“The business remained well positioned to fund its growth ambitions as well as continued dividend flow to its shareholders,” it said.

National Foods’ other divisions such as flour milling, the moving consumer goods (MCG), and oil division recorded significant performance during the period under review.
“The flour division produced a solid result for the period with volumes increasing by 16 percent as compared to last year.
“The growth emanated from the baker’s flour category and in particular strong demand from all of the major plant bakers who are now sourcing all of their flour requirements locally.
“The MCG division produced a significantly improved result, driven by rice volumes, which increased by 54 percent and Red Seal salt, which maintained its market leading position,” it said.
National Foods holds a 40 percent stake in Pure Oil Industries and its results are equity accounted.
“The business produced an excellent set of results for the period with revenue increasing by 138 percent over the prior period,” it said adding that the stock feeds division produced a reasonable performance for the period.
The stock feeds division’s volumes declined by three percent compared to the prior period, with most recent data from the Stockfeed Manufacturers Association showing nationally that feed volumes manufactured declined by 11 percent for the second half of 2016 compared to the same period in 2015. Capital expenditure for the period amounted to $2,1 million.
The group continues to support local farming with 5 800 hectares of maize, wheat and soya beans having been planted through its scheme.
“In addition to this, Pure Oil Industries launched soya bean contract farming scheme for the 2016/17 season where the production of 1 300 ha of soya beans has been supported through the provision of inputs to contracted farmers,” it said. — 

Related Posts
Political risk looms for SADC-focused businesses
Harare - Political risk factors are looming large for businesses focused on key southern African markets, with analysts now anticipating leadership changes in South Africa, Zimbabwe, Angola and the Democratic ...
READ MORE
British Firms Underplay Zim Corruption
HEADS of British multinational companies have made startling disclosures that appeared to suggest they were comfortable with the level of corruption in Zimbabwe, saying sleaze in the country was insignificant ...
READ MORE
Chinamasa says banks have credible plans to sell stakes to locals
HARARE — Foreign banks operating in Zimbabwe have submitted credible plans on how they intend to transfer majority shares to locals, the country’s finance minister said on Saturday, reducing the ...
READ MORE
Fastjet sees weaker than expected revenue in 2015 and 2016
* Prolonged adverse effect of presidential election in Tanzania has led to reduced governmental and civil service traffic and lower demand for travel more widely across country * Zimbabwe-international route approvals ...
READ MORE
Tough mines regime on cards
RESOURCES firms with shares listed on foreign stock exchanges will be barred from acquiring mining rights in Zimbabwe, while investors holding mining titles in the country will not be allowed ...
READ MORE
SABMiller shareholders comfortably back AB InBev takeover offer
LONDON (Reuters) - SABMiller shareholders backed the brewer's $100-billion-plus takeover by rival Anheuser-Busch InBev by a large majority on Wednesday, paving the way for one of the biggest corporate mergers ...
READ MORE
SABMiller Africa touts Chibuku Super to grow revenue
BULAWAYO, – SABMiller says its Zimbabwean subsidiary – Delta Beverages’ low-cost, mass market sorghum beer – Chibuku Super is key to the growth of the group’s revenue as it turns ...
READ MORE
Zimbabwe cement makers want tariffs on imports to stop collapse of industry
HARARE — Zimbabwe’s cement producers want the government to impose tariffs on imports, including from Nigeria’s Dangote Cement, saying this would prevent the collapse of the local industry and save ...
READ MORE
Zimbabwe economy to grow 3,2pct this year, to marginally expand till 2017 – World Bank
HARARE, – Zimbabwe’s economy will grow by 3,2 percent this year — faster than the global average — and pick up to 3,7 percent next year, the World Bank said ...
READ MORE
Energy minister on Intratrek: We erred, but no harm done
HARARE,– Energy Minister Samuel Undenge has admitted that rules were not followed in the payment of a $5 million advance to controversial firm Intratrek, but still insisted that the payout ...
READ MORE
Political risk looms for SADC-focused businesses
British Firms Underplay Zim Corruption
Chinamasa says banks have credible plans to sell
Fastjet sees weaker than expected revenue in 2015
Tough mines regime on cards
SABMiller shareholders comfortably back AB InBev takeover offer
SABMiller Africa touts Chibuku Super to grow revenue
Zimbabwe cement makers want tariffs on imports to
Zimbabwe economy to grow 3,2pct this year, to
Energy minister on Intratrek: We erred, but no

Arts & Entertainment

Arts & Entertainment

Drake ends Sheeran’s Billboard 200 reign, smashes streaming record

27th March 2017 Staff Reporter 0

Drake ended Ed Sheeran’s two week reign atop the Billboard 200 album chart on Monday, selling a monster 505,000 copies of his new album “More Life,” according to figures from Nielsen SoundScan. The Canadian rapper, […]

Arts & Entertainment

Ex-Utakataka bassists to launch album in Mzansi

25th March 2017 Staff Reporter 0

RONNIE Mudhindo’s musical journey is not complete without the mentioning of his early days with the late Tongai “Dhewa” Moyo and Utakataka Express band. The reference involves both sweetness and sourness. Utakataka fans may remember […]