National Foods reports 14% growth in volume despite being derailed by poor performance in maize category

ZIMBABWE – National Foods Holdings Limited, Zimbabwe’s listed agri-industrial concern has reported a 14.2% rise in volumes to 395 000 tonnes for the nine months to March 31, 2021, compared to the same period the previous year.

However, excluding the maize category, growth is pegged at 47%. Meanwhile, for the third quarter volumes decreased by 2.4% to 131 000 tonnes but increased by 35 percent when 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.

Volumes in the flour division grew by 46% on a year-to-date basis, as demand 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. 

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“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,” indicated Natfoods. 

National Foods third quarter overall volume decreased by 2.4%

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.

Stockfeed volumes are reported to have grown by 27% 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%, driven largely by rice and salt. While, the Snacks & Treats unit saw volume increase of 44% 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, the food manufacturer 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. 

National Foods will again support local wheat contract farming, with target plantings set at 5,300 hectares.

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