admin
Edgar Vhera
Agriculture Specialist Writer
ZIMBABWE Stock Exchange (ZSE) listed milk processing giant Dairibord Holdings has expanded its supply and distribution networks to neighbouring South Africa amid plans to also invest in Zambia, Botswana and Mozambique to broaden revenue streams.
Dairibord Holdings Ltd chief executive officer Mrs Mercy Ndoro revealed this yesterday, as she refuted claims by some social media outlets that the company was closing business in Zimbabwe.
“Dairibord notes with concern various online media reports on the purported closure of its Zimbabwe operations and subsequent relocation to South Africa. Our company has a longstanding history of successfully exporting its heritage brands to South Africa and other regional markets but was failing to meet demand,” she said.
Consequently, Dairibord has initiated strategies to optimise supply and distribution channels in South Africa with the intention of replicating this model in adjacent markets such as Zambia, Botswana and Mozambique, she said.
The company seeks to make use of the Africa Continental Free Trade Area (AfCFTA) and enter the regional market for enhanced foreign currency generation.
Mrs Ndoro added: “Dairibord remains firmly committed to its Zimbabwean roots and will continue to operate within the country. The company is investing in capacity enhancement to support its growth ambition. These investments are a clear demonstration of the company’s confidence in its future and unwavering dedication to serving the local and regional markets.”
Dairibord is the largest milk processing company in Zimbabwe with 70 years of experience. In its financial year ended December 31, 2023, Dairibord revealed that raw milk intake by the group had increased 10 percent to 31 429 000 litres in comparison to the previous year.
The report said in the outlook, raw milk supply growth and capital investment drive would underpin the overall volume trajectory, with focus on expanding plant capacities, optimising manufacturing capabilities, maintaining financial discipline and investing in technology and innovation to enhance product offerings.
This year the percentage raw milk intake from the national total is expected to improve with the 2024 first half results indicating a 40 percent surge in milk uptake to 19, 9 million litres against 12 million litres during the same period last year.
Dairibord works with small and large-scale farmers to grow raw milk intake as part of the country’s import substitution strategy.
Meanwhile, in the 2022 budget, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube extended duty suspension on minimum quantities of milk powder and as a quid pro quo, dairy processors were expected to increase support to out-grower schemes with a view to build the stock of dairy herd, in order to increase raw milk production.
He followed this in the 2023 budget by proposing a gradual reduction on a sliding scale of milk powder imports.
“In line with the objectives of National Development Strategy 1 (NDS1), there is need to gradually substitute imports through increased production, coupled with a simultaneous increase in the uptake of raw milk by processing companies from the current level of 70 million litres to 130 million per annum by 2025,” Prof Ncube said.
The effects of these fiscal measures are beginning to bear fruit as milk product imports dropped 16 percent from US$37 million in 2021 to US$31 million in 2022. They further fell by another 15 percent to US$27 million in 2023. In the first half of this year, the imports also dropped by 21 percent from US$11, 8 million to US$9, 4 million.
Online Reporter