Food and dairy processor, Dairibord Holdings Limited’s foreign currency sales volumes for the period to May 2022 grew by 145 percent compared to the same period in the prior year as the group put in place measures to boost its foreign currency generation.
According to the group, this accounted for 40 percent of volumes sold during the period.
Government allowed businesses to also trade in foreign currency locally which boosted their foreign currency generation, on top of export sales.
For Dairibord, exports grew by 94 percent compared to the same period last year while domestic foreign currency earnings closed the period 158 percent stronger.
In terms of raw milk utilized, it remained the same compared to prior year and the company has retained its position as the processor with the highest milk intake.
Total sales volumes jumped 13 percent over prior year mainly driven by significant growth in beverages and foods.
Dairibord was, however ,not spared from the economic headwinds affecting most businesses in the economy. Global shocks such as the conflict in Ukraine have had a knock-on effect on businesses across sectors, causing supply chain disruptions.
Although Covid-19 was relatively contained in Zimbabwe, allowing businesses to largely operate uninterrupted, the pandemic still caused supply chain disruptions, with lockdowns implemented in China.
“Overall performance was not spared by headwinds in the operating environment,” said the group in a trading environment for the period under review.
Additionally, foreign currency shortages and depreciation of the local currency continued to weigh on businesses with price distortions experienced in the economy while the escalating costs and inconsistent supply of utilities, especially electricity and water added to the woes.
For the dairy processor, the continued high cost of raw milk, raw and packaging materials, utilities, fuel and labour during the period contributed to cost-push.
As a result, Dairibord recorded growth in material costs was 165 percent compared to prior year, but contained within revenue growth.
Overheads also grew by 153 percent against revenue growth of 165 percent, a result of cost containment initiatives, according to the group.
In terms of investment, the group commissioned its second UHT filler and ambient Cascade.
This is in addition to investment in fleet to enhance distribution, reduce costs and enhance revenue.
While the group has cost-containment measures in place, the impact of Covid-19 is expected to continue weighing on businesses in the short to medium term as the world over is yet to find a lasting solution to the pandemic.
Limited foreign currency, high cost of borrowing and inflationary pressures are also expected to continue posing a threat, not only for Dairibord but businesses across sectors.