Online Reporter
Business Reporter
As climate change continues to wreak havoc on agriculture, Seed Co Limited is taking proactive steps to address the challenges facing the industry.
The group, which operates in several African countries, has a strong pipeline of new products under its research and development (R&D) programme, designed to mitigate the impact of climate change on crop yields and seed varieties.
Group Chief Executive, Morgan Nzwere, said in an interview that Seed Co’s research goals are set annually to address specific climate change challenges.
“All our research programmes are very much focused on coming up with drought-tolerant varieties that mature early,” he said. “The company is also working on developing varieties that are resistant to diseases such as cob rot and fall armyworm, maize streak virus, and maize lethal necrosis disease.”
Seed Co is not only focusing on developing climate-resilient varieties but also globalising its R&D to create varieties that perform well in unique environments outside Zimbabwe.
Mr Nzwere said the company is strengthening its regional research assets in East Africa and establishing a new rice and yellow maize breeding station in West Africa.
“We are seeing a lot of progress in terms of our research for cob rot and fall armyworm, maize streak virus and maize lethal necrosis disease, and tolerant maize hybrid development bearing fruit in partnership with Limagrain,” he said.
He added that the company’s research efforts are also focused on developing early-maturing maize seeds that can thrive in areas with limited rainfall.
Seed Co’s commitment to R&D is evident in its target to spend 10 percent of its revenue on research and development.
Mr Nzwere said the company’s breeders request expenditure on various projects, and Seed Co is supplying them with the necessary resources to achieve its research goals.
“Climate change is a big issue in terms of agriculture, considering what happened with the El Niño drought this year and this year’s expected La Niña, confirming that climate is changing very fast,” Mr Nzwere said. Seed Co’s research efforts are focused on developing climate-resilient varieties that can thrive in areas with limited rainfall and withstand diseases and pests.
Seed Co is also adapting its distribution model in response to the formal retail sector’s decline. Mr Nzwere said the company has opened its own shops and established sales points in various outlets to control cash flow and reduce dependence on retailers.
“We have seen that a number of retailers have been struggling to pay their debt; we all know the challenges at OK Zimbabwe, and we have seen this with other wholesalers, and it is causing us to change the way we distribute seed,” Mr Nzwere explained.
Despite the challenges facing the industry, Seed Co is well-positioned for growth. The company expects to have between 53 000 and 55 000 tonnes of maize available for sale this year, up from 43 000 tonnes last year.
According to analysts, Seed Co’s strategic focus on regional exports, advanced seed technologies, and adaptive strategies for unpredictable climatic conditions positions it well for recovery.
FBC Securities, in its earnings review report, said the company’s strong market position and robust top-line growth make it an interesting medium- to long-term opportunity for risk-tolerant investors.
FBC said the listed group’s liquidity remained healthy, with improved cash balances and inventories, indicating its ability to cover short-term obligations.
Mr Nzwere said the group, as a food security counter, expects to remain relevant in all the markets where it operates. He added that this year the group expects to have between 53 000 and 55 000 tonnes of maize available for sale, up from 43 000 tonnes last year.
In terms of production and processing, Mr Nzwere said the group added a packing line in Zimbabwe in FY25 and a colour sorter this year. Additionally, the group constructed and commissioned a warehouse in Zambia, which serves as the regional production and processing hub.
“In Zimbabwe, we have also been able to successfully partner with banks to fund growers, which was predominantly on our balance sheet. We are trying to move this as much as possible off-balance sheet to make our growers directly get funding from the bank,” he said.
In terms of sales and marketing in Zimbabwe, maize volumes rose by 91 percent to 19 512 tonnes; soya beans increased by 69 percent; wheat, 8 percent; barley declined by 27 percent; and other crops also went up by 19 percent.
“Maize remains our anchor product, and we have been doing quite a lot in terms of market penetration. We opened our own shops across the country to try and cut the time that it takes cash to get to our till points. We also opened another shop in Kwekwe over and above the ones that we already opened,” said Mr Nzwere.
Mr Nzwere said the open and export market had a combined 56 percent volume, after achieving record exports of 33 percent of volume, while the local open market accounted for 23 percent of volume.
In the region, Mr Nzwere said sales dropped 9 percent due to stockouts in Malawi, Tanzania and Zambia, as well as delayed rains in Kenya and Botswana, while in Mozambique there were political disturbances.
