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Business Reporter
National Foods Limited will invest about $9 million in the current financial year towards upgrading its maize and flour mills, stockfeed and FMCG platforms to improve efficiencies, chief executive Mike Lashbrook said. This is an increase from $5,7 million capital expenditure for the year to June 30.

Mr Lashbrook told The Herald Business yesterday that with on-going investments in the flour division, manufacturing facilities are now operating to expectation.

“Our capex of $8,9 million for the coming year will be applied primarily in the flour mills, where just under half of the funds will be spent. This year is the second of our three year flour mill upgrade and the program is well on track.

“The balance of the capex represents further upgrades to our core maize, stockfeed and FMCG platforms as well as continuing upgrade of our IT infrastructure,” said Mr Lashbrook.

Volume growth in the flour business during the year to June 30 was driven by the bakers’ flour channel, while in the pre-pack flour segment Gloria and Red Seal continued to perform strongly on shelf.

Towards year end, Snow White Cake Flour was introduced as a premium self-raising flour variant and was well received by the consumer

Natfoods continued to support local farming, with 4,400 hectares of maize and soya beans having been cropped during the recently ended summer season and a further 4,200 hectares of wheat sown in the current winter wheat season.

Mr Lashbrook said disposal of non-core properties and assets continued during the year and is now largely complete and these assets were primarily properties that Natfoods was renting to third parties.

“The disposal of non-core assets is now largely complete. Our strategy has been to dispose these low yielding assets and reinvest the proceeds in our core businesses. As noted, this work is now largely complete and we do not anticipate any disposals of consequence happening this year,” said Mr Lashbrook.

During the year, the Natfoods board approved two new projects, which will be implemented subject to regulatory approvals and one of the investments represents an opportunity to value add existing products while the second is a new category entry.

According to the company, both investments are aligned to the company’s long term strategy and offer opportunities to better leverage the company’s existence.