Food processing giant, National Foods Holdings Limited is upbeat about its prospects in the prevailing economic stability, which it contends has laid a strong foundation to push its strategy of diversified product portfolio.
The Victoria Falls Stock Exchange (VFEX) listed food giant is banking on obtaining stability to help the group deliver on its mandate.
The past financial year has been characterised by a fluid economic environment, largely due to exchange rate volatility. Inflation was relatively moderate at the start of the year, following various difficult but necessary policy interventions, principally a reduction in Zimbabwe dollar liquidity and an increase of interest rates to 200 percent per annum for the local currency.
Moving into the second half of the group’s financial year, there was the rapid devaluation of the local currency, in line with the increased Zimbabwe dollar monetary supply.
Finally, as the year drew to an end, exchange rates stabilised as local currency liquidity reduced, and the auction system was further refined.
NatFoods chairman Mr Todd Moyo, in the group’s 2023 annual report, indicated that while the volatility meant that the group’s operating plans needed to be regularly and swiftly adjusted and at times this detracted from their core focus, there has also been some kind of stability that has prevailed into the new financial year.
He said this was a welcome development, hoping the stability could be maintained going forward.
“The past year has been a challenging one for the group, with a complex set of dynamics including the fluid operating environment as well as the inflationary pressures from global commodity prices having to be carefully managed,” said Mr Moyo.
“The group is encouraged by the recent economic stability, which if maintained, allows our management team to focus on their core mandate of better serving the consumer.
“The consequent monetary stability was welcome, as it meant our raw material imports and growth ambitions could be sustainably funded. We remain encouraged at the major economic developments occurring in our country, and especially the investment occurring in the mining sector, which should greatly assist the maintenance of a more stable exchange rate environment in the coming years,” added Mr Moyo.
One of the group’s new product lines includes cereals, which according to Mr Moyo, has seen a volume growth of 47 percent year on year to June 2023.
“The second phase of our breakfast cereal investment was commissioned towards the end of the first half, resulting in the launch of a new range of breakfast cereals including corn flakes, bran flakes, wholegrain flakes, and instant cereals. Our objective is to deliver a range of cost-effective, healthy, and nutritious breakfast cereal ranges for the market, as articulated by the “Breakfast is for Everyone” byline in the various promotional activities,” said Mr Moyo.
He added that post-year end, a range of cereals under the “Nutri-Pops” brand has been launched, with this product aimed at younger consumers. The group has also entered the baby cereal market under the Nutri-B brand.
Mr Moyo said: “The response of the market to these new products has been encouraging, both in terms of quality and affordability, and we remain encouraged at the longer-term prospects for this unit.” – Herald