DZL sets aside US$7m for new projects

By Golden Sibanda
DAIRIBORD Holdings has earmarked US$7,3 million for capital projects to enhance productivity and competitiveness as the milk processing group targets US$100 million revenue in the current financial year.
This comes as the firm seeks to create capacity and a competitive edge to adequately supply the local market and increase its presence in regional markets.
Group chief executive Mr Anthony Mandiwanza outlined this as he presented the company’s 2010 accounts on Wednesday.
He said the firm last year spent US$4,3 million on capital projects. It had planned a further US$7,3 million as it seeks to assert its dominance in the market.
The CEO said the funds would be spent on technology to enhance capacity and quality in the production of yoghurt, milk, tomato sauce, salad cream and Nutriplus.
The money would also be used to enhance Dairibord’s management information systems, distribution capacity and rebranding of products.
To raise capacity, Dairibord intended to complete the installation of the Nutriplus plant at its Chitungwiza factory at a cost of about US$2 million. Mr Mandiwanza said plant installation would be completed in April.
Dairibord is currently not able to meet huge demand for yoghurts and the firm has invested in a new plant, to be commissioned in May.
In August last year, Dairibord commissioned an ice cream plant and followed that up by commissioning a beverages plant at Lyons in December.
The firm said it would continue to invest in human capital development to remain a leader in the domestic and export markets.
Last year revenue rose by 31 percent to US$73 million and is expected to rise by 39 percent to US$104 million this year.
For the year under review Dairibord’s operating income went up by 68 percent to US$8 million. Profits are projected to grow to US$12 million by December this year.
Beverages contributed 38 percent of revenue while liquid milks and food products weighed in with 29 percent.
The firm ended the year on a cash positive position of US$10 million while borrowings increased by 30 percent on prior year to US$5,3 million.
Mr Mandiwanza said the investment in production capacity and enhanced competitiveness would enable the company to serve the local market. Increased presence of milk-based beverages in Botswana, Mozambique and Zambia was anticipated.
He said the firm was confident its associate company, Charhons in which it has a 40 percent stake, would soon benefit from last year’s US$1 million working capital injection.