HARARE – National Foods Holdings Limited’s volumes for the nine months to March 31, 2021 jumped 14,2 percent to 395 000 tonnes compared to same period in the prior year. Excluding maize, the growth is pegged at 47 percent.
For the third quarter to March 31, 2021, volumes decreased by 2,4 percent to 131 000 tonnes compared to last year and have increased by 35 percent excluding maize.
“The maize division has had a difficult year. This has largely been due to the substantial volumes of maize meal imports from South Africa, particularly into the south of the country. These imports have subdued volume performance and impacted margins,” said the group in a trading update for the period under review.
Volumes in the flour division have grown by 46 percent on a year to date basis as demand has recovered in the category, assisted by support from the foreign currency auction which resulted in general stability in the environment coupled with ability to receive foreign currency payments from customers.
“The resultant price stability following the introduction of the above measures saw a sustained and continued reduction in inflation.
“The price stability, along with increased real incomes in certain sectors of the economy saw an improvement in consumer demand. This resulted in strong growth in volumes across the product portfolio with the exception of the Maize category.
“Liquidity in Zimbabwe dollar terms remained constrained, necessitating precise management of working capital models, particularly over the seasonal peak demand period (December — March).
“The banking sector is beginning to offer US$ facilities, a most welcome development in view of the lower inflation and the very high cost of Zimbabwe dollar borrowing,” said Natfoods.
Stockfeed volumes rose 27 percent driven by increased demand for protein products, notably in the poultry segment. The most recent quarter saw growth slowing as demand for beef feed declined on the back of improved pastures.
The Groceries division sustained its growth trend, with year to date volume growth of 95 percent, driven largely by rice and salt. The Snacks & Treats unit saw volume increase of 44 percent for the year to date.
“This result was encouraging in view of the fact that the Covid-19 related movement restrictions has dampened demand in these categories,” said Natfoods.
Going forward, management is upbeat of maintaining the growth trajectory on the back of the anticipated bumper harvest which should boost disposable incomes. Additionally, this means the group will source grain (maize) requirements locally over the next 12 months. But, the 2021 local wheat will be delivered in October and November, and wheat imports will be required until this point to supplement the remaining stock from the 2020 harvest.
Said the group: “Turning to the outlook, the improved harvest should drive further improvements in consumer spending power.
“This should result in sustained volume momentum in all categories with the exception of maize, where it is expected volumes will be impacted by increased retentions at a household level.” – Business Weekly