Seed Co Int reports 70 percent sales growth
Seed processor Seed Co International (SCI) reported 70 percent growth in sales volumes for the five months to August this year, compared to the same period last year, largely driven by early relief orders from Mozambique and increased activity in East Africa.
Despite the off-season in most South and East African markets, the SCI has experienced growth in sales volumes across the group while momentum has started picking up across the group ahead of the main selling season,” the company said in a trading update.
Seed Co is a Pan African involved in the development of seed species that include hybrid maize, wheat, soya bean, beans, rice, potatoes, sorghum, cotton, and vegetables. It is dual-listed on the Victoria Falls and Botswana stock exchanges.
During the period, profit margins were under pressure, primarily due to the weakening of regional currencies.
Under the area of research and development programmes, the company continues to innovate with a solid pipeline of new pest-resistant, early maturity, and high-yield varieties to address issues about climate change.
These include new products such as a new maize hybrid SC553 registered in Kenya and cob rot-resistant maize.
New soybean varieties, SC Signal, and SC SL01, have been listed on the ECOWAS catalog, further broadening the company’s market reach.
Furthermore, new trials for sorghum, pearl millet, and potato are in progress, with the latter expected to be commercialized within two years.
The company expects a group-wide maize seed production yield of 39 200 metric tonnes, which is 14 percent higher than last season.
At this level, the group will adequately meet anticipated regional demand. Seed intake from the company’s growers and farms is also on track with about 45 percent for maize and 60 percent for soybean having already been processed.
SCI reported that 40 percent of its US$49,5 million in year-end trade receivables has been collected.
Meanwhile, total stock available for current year sales stands at 58,700 tonnes , which is 14 percent higher than the prior year and more than sufficient to meet forecast demand in the upcoming season.
SCI remains alive to the potential impact of El Nino, which is expected to result in less rainfall in Southern Africa. The group plans to leverage its geographical diversification and varied seed varieties to mitigate potential impacts.
“The benefit of our geographical diversification and a chest of short to long-maturing seed varieties will help us place our products appropriately and mitigate the impact of El Nino on seed sales –high-value high-yielding long-maturing varieties for more rainfall will be placed more in East Africa while and short-to-medium maturing drought tolerant varieties will dominate seed placements in Southern Africa,” said the group.
Demand is particularly strong in East Africa, led by Tanzania, while Mozambique remains a good market. Ethiopia has also just granted the company a non-conditional operating license, offering yet another avenue for growth.