HARARE – Dairibord Holdings experienced a mixed first half of 2024, with varied impacts from policy changes, production adjustments, and export growth.
Beverage volumes dropped by 8%, primarily due to the impact of recent policy changes. The introduction of Value-Added Tax (VAT) on certain products, including the popular Pfuko, has affected sales. Additionally, the introduction of the Zimbabwe Gold (ZiG) currency led to a shortage of small change, further complicating transactions and impacting consumer purchasing behavior.
The company faced increased production costs due to the implementation of a sugar tax, which added to the financial strain on beverage production. These policy-driven cost hikes have contributed to the overall decline in beverage volumes.
Despite these challenges, Dairibord reported a significant increase in milk purchases from farmers, acquiring 19.2 million liters in the first half of the year. This represents a 51% increase compared to the same period last year, reflecting improved output from dairy farmers and Dairibord’s commitment to supporting the local dairy industry.
On a positive note, Dairibord saw a substantial rise in exports, which were up 59% in the first half of 2024. The company’s main export markets include neighboring countries in the Southern African Development Community (SADC) region, with notable sales in Botswana, Mozambique, and Zambia.
Dairibord’s top export brands contributing to this growth include:
- Cascade: A leading beverage brand, popular for its refreshing fruit drinks.
- Lacto: A fermented milk product that has gained significant traction in regional markets.
- Fun ‘n Fresh: A range of flavored milk drinks that continue to appeal to a younger demographic.
The increased export activity has helped offset some of the domestic market challenges and is a testament to Dairibord’s strategic focus on expanding its footprint beyond Zimbabwe’s borders.
As Dairibord navigates through the rest of 2024, the company will need to address the domestic market challenges posed by recent policy changes while capitalizing on the momentum gained in the export markets. The focus will be on optimizing production efficiency, managing costs, and exploring new markets to sustain growth in a complex economic environment.
