malvernmugadzikwa
Enacy Mapakame
Food processing giant, National Foods Holdings Limited’s total volumes for the third quarter to March 31, 2022 rose 3 percent compared to the same period last year impacted by an expected decline in maize offtake after a good 2021/22 harvest.
According to the group, this is compared to year on year volume growth of 24 percent achieved in the first quarter and 8 percent achieved in the second quarter.
Excluding maize, volumes increased by 9 percent compared to prior year and on a cumulative year to date basis, volumes are 11 percent ahead of prior year, driven by stockfeeds, rice, salt and snacks.
Stockfeeds rose 16 percent for the period while snacks volumes increased 10 percent.
While market watchers have guided the group’s performance to remain solid on the back of strong demand and improved disposable incomes due to enhanced economic activity especially in agriculture, there are also concerns over rising inflationary pressures eroding consumer spending.
“Whilst consumer demand remains solid, it has clearly been impacted by the recent resurgence in inflation. To this end, we welcome and support the measures taken by the authorities to control inflation.
“The current agricultural season has been impacted by erratic rainfall patterns, and it is likely that imports of maize and soya will be needed before the 2022-2023 harvest.
This is disappointing given that the initial weather forecasts and production estimates had looked encouraging,” said the group in an update for the quarter under review.
However, both Government and private sector are making significant efforts to promote the forthcoming local winter wheat crop, a critical initiative in view of the substantial increases in international wheat prices.
The group is also cautiously monitoring headwinds caused by the Russia/Ukraine war which has caused a spate of global commodity price increases especially wheat, industrial gas and fertilisers.
“These increases will see inflationary pressure in US$ terms in many of the categories we participate in during the coming periods, and especially the flour to bread value chain.
“The Group is carefully managing its pricing strategy, doing its utmost to minimise the impact on consumers by moderating prices in order to retain volumes,” said Natfoods.
Meanwhile, its Harare Cereal and Bulawayo Flour mill projects are making steady progress and are expected to be commissioned mid – 2022 and early 2023 respectively.
During the third quarter, flour and cereals segments rose 4 percent and 52 percent compared to the same period last year.
Despite the adverse impacts of the war in Ukraine on the group’s operations, management remains upbeat of its performance on a positive trajectory for the general economy. The group is also looking at broadening its product portfolio.
Said Natfoods: “Our team continues to investigate the feasibility of additional complimentary categories, which will broaden our portfolio of products.”
Bongani Ndlovu