malvernmugadzikwa
Nelson Gahadza
DIVERSIFIED conglomerate Innscor Africa says its investment programme undertaken between 2021 and 2024 has borne fruit after the group registered sterling overall volume growth in 2024.
Innscor said the US$157 million worth of investments across its operations saw the expansion of capacities, extension of manufacturing capabilities and investment in new products for the group.
In financials for the year to June 30, 2024, group chairperson Mr Addington Chinake said despite the complex trading environment, positive volume growth was registered across all core group manufacturing units.
“This was underpinned by a firm recovery within the mill-bake segment, combined with increased contribution and capacity uptake in both the beverage and other light manufacturing segments.
“Volumes within the protein segment closed marginally ahead of last year on aggregate,” he said.
Innscor’s operations span across various sectors of the economy. The group has presence in the manufacturing, distribution and retailing of household commodities and fresh produce.
While it remained cautiously optimistic of the medium -to long-term prospects of the economy, Innscor was hopeful that the authorities would implement consistent and clear policies that encourage more market-determined outcomes, to allow for improved capital allocation decisions by industry.
Mr Chinake said the group had gone through a three-year period of intensive and significant investment in factory expansion and, in doing so, also entered into several exciting new categories.
“Many of these investments are now complete or nearing completion, and, as a result, focus will now be deployed by management in ensuring that these new investments generate the targeted returns,” he explained.
He said, as a manufacturing entity, the attainment of critical volume mass was vital to ensure that the necessary operating efficiencies and economies of scale could be achieved.
“Volume performance will, therefore, be a key area of focus for management in the year ahead, pricing decisions will be undertaken scientifically and precisely, with the overall objective of ensuring convenient and affordable product availability to the consumer,” stated Mr Chinake.
During the period under review, the group’s revenue grew by 13,2 percent to US$910 million over the comparative year.
The performance was driven primarily by volume growth across the entire portfolio.
The group’s operating profit, before depreciation, amortisation and fair value adjustments, net of financial gains or losses, for the current financial year that is under review was US$86 million and represented a growth of 13,7 percent over the US$75,6 million recorded in the comparative financial period last year.
In terms of operations, in the mill-bake segment, current year loaf volumes in the bakery division closed 12 percent ahead of the comparative period last year, supported by additional capacity, enhanced loaf quality, stable flour pricing, improved distribution efficiency and focus on ensuring convenient and efficient pricing to the consumer.
During the period under review, the division commissioned its new state-of-the-art and fully automated production line in Bulawayo during the second quarter.
“This new line has operated extremely well since commissioning, significantly enhancing the manufacturing efficiency, quality and consistency of the loaf in the operation’s Southern region market.
“Further automation initiatives are underway in the business in both the Harare and Bulawayo production sites, and, in addition, a new, fully automated production line will be added to the Harare site in the latter part of the new financial year.
“These initiatives to grow and enhance the manufacturing base will be supported by continued optimisation of the bakery distribution business,” revealed Mr Chinake.
National Foods recorded an overall volume growth of 6 percent over the comparative prior year period, driven by a strong recovery across the mature milling operations and supported by pleasing volume uptake in the new fast-moving consumer goods (FMCG) business cluster.
“Current year volumes in the flour division were similar to those achieved in the prior year, with intensified competition and somewhat muted demand in the category.
“Pleasingly, there has been a recovery of volume momentum heading into the new financial year,” said Mr Chinake.
He said the new state-of-the-art flour mill in Bulawayo, which had been operating for just over a year, delivered very pleasing results in terms of product quality and operating efficiencies.
The group’s stockfeed division delivered volume growth of 8 percent over the comparative prior year period, with the performance largely driven by the poultry category, which continued on its positive growth trajectory.
Volume in the maize division grew by 21 percent year on year.
Current year volume in the cereals unit grew by 8 percent over the same prior year period. The division’s portfolio continues to grow on the back of the strategy to offer a full range of breakfast cereals to the consumer.
“Pleasingly, some of the new products introduced have started to make some inroads in regional markets, albeit at low volumes at this point,” said Mr Chinake.
In the protein division, Colcom Foods sustained demand for fresh pork during the first half of the financial year, resulting in an overall 5 percent volume growth over the comparative year.
The processed product categories also performed well, with a marked improvement in volumes of polonies, bacons, hams and sausages.
“Although overall pig volumes at Triple C remained at the same levels as the comparative year, the overall volume of pork supplied improved against the comparative year on the back of increased pig weights and improved efficiency of the upstream piggery operations,” he further revealed.
At Irvine’s, current year volume growth was muted against the comparative year, with the table egg, day-old chick and frozen chicken categories all operating at similar levels to the comparative year.
Mr Chinake said investment activities targeted at further optimising production in all core product categories were planned for the year
ahead.
In the beverage and other light manufacturing segment, Prodairy delivered overall volume growth of 26 percent over the comparative year, on the back of a significant investment programme across the entire product portfolio.
At Mafuro Farming, overall current year milk volumes closed substantially ahead of the comparative year, following an investment to expand the operation’s milking herd and dairy operations across the three farming sites.
“This business is now well placed to ensure that there is a sustainable
and efficient supply of high-quality raw milk into the downstream manufacturing operation,” said Mr Chinake.
Online Reporter