ZIMBABWE – Dairibord Zimbabwe Ltd (DZL), Zimbabwe’s largest milk processor, reported 125% growth in revenues during the five months to end May 2019 supported by increase in export earnings, which grew more than four fold.
Speaking during the company’s annual general meeting, Anthony Mandiwanza , the group’s chief executive officer said that during the period, the company generated US$2.1 million in export earnings up from US$500 000 recorded in the same period last year.
However, Mandiwanza said the amount remains small, but the company is confident on improved performance for the as it continues to explore more markets.
“We think the US$2.1 million is a small amount, but we are moving in the right direction because we are pursuing more export strategies.
“Our route to market in Malawi will remain. There are a number of channels that we have established to support the export of our products into that market. So, we are not going to lose out,” he said.
Dairibord, which is set to exit operations in Malawi by June this year, said that the despite economic hardships in the country, the company will still export its products into the market.
“In Malawi, we are not able to utilise the holding company’s balance sheet to capitalise the business and also we were not able to bring together shareholders to recapitalise the operation.
“So, our strategy to earn foreign currency and exiting our Malawi unit is not contradictory,” Mandiwanza said.
According to Mandiwanza, brands such as Quick Brew, Cascade and RabRoy are also gaining traction in the region.
The dairy processor note dthat the 125% growth in revenues in the period under review was also supported by product mix performance, price adjustments and the overall increase in volume.
According to a report by The Chronicle, volumes sold were up 8% while the selling price advanced 95%, resulting in an average increase of US$0.62c per litre.
“Volume growth was trending positively, but sustainability going forward is threatened by erratic supply of inputs.
“On the selling price, we continue to adjust particularly in line with developments on the market such as inflation, input cost pressures and exchange rates,” he said.
Foreign liabilities credits, which support the company’s capital projects, went up US$1.1 million with trade payables at US$0.8 million, giving a total of US$1.9 million.
“We have worked tirelessly as management to drop that amount from US$4 million as at end of December 2018.
We are trying to minimise the huge impact of having a huge foreign currency debt in a very volatile environment which we are operating in. In future, we believe that the amount will continue to go down so that its negative impact on the company’s performance is limited,” Mandiwanza explained.
Dairibord’s major export markets include Zambia, Botswana, Malawi, Mozambique and South Africa.