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Charity Ruzvidzo Business Reporter
IMPORTED milk products mainly from South Africa that have flooded the Zimbabwean market are threatening the viability of local producers, a local company has said.
Zimbabwe Stock Exchange (ZSE)-listed Dairibord Holdings said in written responses to questions from Business Chronicle that the imported products were coming into the country at a much lower price.
“As a result of low raw milk availability in Zimbabwe which has resulted in a demand-supply gap, imported milk products mainly from South Africa have flooded the Zimbabwean market.
“These imports come in at much lower prices threatening the viability of local processors,” the company said.
“Local processors buy raw milk at an average price of $0,64 per litre while raw milk in South Africa is produced at $0,40 per litre. In addition local processors face a number of other challenges like higher production costs relating to the use of generators due to electricity outages as well as high stock feed prices.
“There is therefore urgent need to ensure viability of local processors in order to grow the local raw milk supply base.”
Dairibord, which manufactures a wide range of dairy-based food and beverage products, has introduced new products as a reaction to local and regional competition.
The company recently introduced Dairibord Novelty, Dairibord Chimombe one litre cartons, Pfuko Udiwo Maheu, Flavour Raver and also re-branded some of their products in a bid to offer consumers a wide choice.
“In order to tap into the long life cartons milk segment, a line extension of Dairibord Chimombe in the one litre range was introduced. This is being toll manufactured in South Africa. Demand is very strong,” it added.
Some of the products have had their designs enhanced and convenient features like tamper proof packaging introduced in line with market trends.
“Dairibord Flavour Raver, a flavoured milk beverage which the group had stopped producing because of the limited milk volumes being received from dairy farmers, was re-introduced,” the company said.
“It should be noted that the low raw milk being produced in Zimbabwe nationally, which currently stands at 55 million litres per annum (contrasted with a peak of 256 million litres per annum in 1991), continues to impact on our ability to introduce more dairy based products.
“It is therefore critical that the government put in place interventions that will ensure that the dairy industry is resuscitated.”
The company that faces competition from 15 other local producers said the introduction of new products has contributed positively to their operations especially with regards to local competitors.
In May Dairibord said it would this year commission five new plants under a $10 million capital expenditure programme to grow its revenues and cut down costs.
derick.khumalo