Enacy Mapakame Business Reporter
LISTED agri-industrial concern National Foods Limited’s volumes for the first-quarter to September 30, 2016 grew 10,5 percent compared to same period last year on the back of strong demand in basic products and effects of the import restrictions.Government this year promulgated Statutory Instrument 64 which removed certain products from the import open general licence to stimulate demand for local products and therefore boost local industry.
Already, some sub-sectors of the manufacturing industry have started recording positives with regards capacity utilisation, which has improved.
“First quarter volumes were firm growing 10,5 percent on prior year,” NatFoods chief executive Mr Mike Lashbrook yesterday told shareholders at the group’s annual general meeting.
“The volume growth was driven mainly by flour, and to a lesser extent rice. SI 64 and import controls have stimulated volume growth,” he said.
Early this year, NatFoods acquired a 40 percent stake in Pure Oils and this, according to Mr Lashbrook has enhanced the group’s product mix. Pure Oils manufactures the ZimGold cooking oil brand.
“The group’s recent acquisition has added a new dimension and exciting dimension to the group.
“Pure Oil is performing strongly and ZimGold has established the country’s top selling oil brand in a very short period of time,” said Mr Lashbrook.
He indicated the group’s focus on snacks and biscuits business will be on market share growth.
Management anticipates the snacks unit to increase its contribution to group’s revenues as the market improves.
With effect from November 01, 2016, NatFoods changed its operating models for depots networks to concentrate on growing the fast-moving consumer goods product portfolio.
In line with this, Gain Cash and Carry will operate the group’s depots which are expected to be transformed into fully fledged wholesalers.
NatFoods has, however, highlighted that the challenging economic environment will put pressure on the business in the near future as consumers’ spend continues to dwindle on cash shortages.
Market watchers, however, believe the agri-processing concern will weather the storm due to its product mix that is inclusive of basic commodities such as mealie-meal, cooking oil as well as the stock feed division.
Additionally, the group has a strong dividend policy, which in turn may attract investors. By close of trade yesterday, the stock was at $3, its highest price in the last 52 weeks.