Innscor sees strong volume growth across units
Diversified industrial conglomerate Innscor Africa Limited recorded a solid volume performance for the third quarter and nine months to March 31, 2023 on growth across business units despite a challenging environment.
During the period under review, businesses operated under constrained conditions due to currency volatility and exchange rate fluctuations. This resulted in waning demand for products and services.
“The group operated under turbulent economic conditions during the third quarter as the market experienced significant inflationary pressure, currency instability, and constrained local and foreign currency liquidity, which gave rise to weakening disposable income within the consumer market,” said group company secretary Andrew Lorimer in a trading update for the period under review.
“In addition, a marked loss of business sentiment was impacted further by uncertainty across the international financial and political landscape.
“While consumer demand remained relatively buoyant across the informal trade, the formal market continued to face a crowding-out effect arising from policy-induced pricing distortions and resultant arbitrage evident across the formal trade,” said Mr Lorimer.
Despite the economic headwinds, Innscor indicated that volume performance for the group, on a cumulative nine-month basis, was ahead of the comparative period.
The protein, beverage and light manufacturing segments registered pleasing volume growth, whilst volumes for the mill-bake segment continued to recover into the third quarter.
At National Foods, volume performance, from a cumulative nine-month perspective, was 5 percent behind the comparative period weighed by the flour division, which recorded volumes at 18 percent behind the comparative nine-month period, due to the international wheat pricing dynamics seen in the first quarter resulting in affordability challenges in the downstream bread category.
“In addition, the flour milling market saw several new players enter, heightening competition in the category,” said Mr Lorimer.
But loaf volumes within the bakery division continued to recover into the third quarter. However, on a cumulative nine-month basis, volumes closed marginally behind the comparative period, driven mainly by the international wheat pricing dynamics experienced during the first quarter. The operation’s new world-class production line in Bulawayo is expected to reach final commissioning imminently.
In the protein segment, the Colcom division, comprising Triple C Pigs and Colcom Foods, continued registering solid volume growth, mainly driven by the fresh pork category, which delivered growth of 9 percent over the comparative nine-month period. Pig production continues to improve, with overall pig supply registering a 3 percent growth over the comparative nine-month period.
Colcom Foods continues its investment drive to upgrade and modernise its factory operations at the Coventry Road site in Harare, while investment to further expand upstream piggery operations is also underway. The new feed mill at Triple C Pigs will be commissioned in the next quarter.
At Irvine’s, cumulative nine-month volumes for the table egg and day-old-chick categories closed 18 percent and 7 percent, respectively, ahead of the comparative nine-month period.
Associated Meat Packers (AMP) registered an aggregate volume growth of 6 percent over the comparative nine-month period. In the beef category, volumes recovered well despite local supply continuing to be constrained on account of disease challenges.
Within the chicken category, consumer demand remained firm, and volumes on a cumulative nine-month basis closed ahead of the comparative period.
AMP opened four new “Texas” branded retail outlets during the nine–months, bringing the total number of stores under management to fifty.
Volumes at Natpak closed 3 percent ahead of the comparative nine-month period, with favourable growth registered across all four divisions.
According to the group, Prodairy delivered 36 percent volume growth over the comparative nine-month period driven by the “Revive” dairy blend category, which delivered volume growth of 65 percent.
Mafuro Farming increased raw milk production by 8 percent over the comparative nine-month period, underpinned by the expansion of the milking herd and production efficiencies.
During the period under review, Probottlers delivered overall volumes which were 9 percent ahead of the comparative nine-month period, mainly driven by investment undertaken to increase the production capacity of the 500ml “Fizzi” line during the previous financial year.
Volumes within the cordials category remain behind the comparative period on account of the previously cited grey-market import pressure evident in the trade, whilst both categories continued to face challenges as regards viable sugar Pricing and trade terms.
The Buffalo Brewing Company (TBBC) introduced its new sorghum beer offering under the “Nyathi” brand in December 2022. Market uptake has been pleasing during its first quarter of operation, and volume performance Has met expectations.
At Profeeds, solid volume growth was achieved across its core categories. The stockfeed division Continued to operate at capacity and registered a growth of 11 percent over the comparative nine-month period, supported by strong demand within the key poultry market, to deliver a 24 percent growth in day-old-chick volumes over the same period.
The “Nutrimaster” fertiliser operation delivered volume growth of 17 percent ahead of the comparative Nine-month period, supported by a strong order book emanating from the most recent summer Row-cropping and tobacco seasons.
At Probrands, despite aggregate volumes lagging on a cumulative nine-month basis due to the business’ restructuring initiatives, favourable volume growth was realised across the finished goods and condiments categories, closing 10 percent and 26 percent, respectively, ahead of the comparative nine-month period.
The business remains focused on creating innovative household and condiment brands for the Zimbabwean market.