Online Reporter
Nelson Gahadza
Seed Co Limited states it has a strong pipeline of new products under its research and development (R&D) in response to climate change, which continues to impact the various markets in which it operates.
Africa, where the group’s operations span, has increasingly been vulnerable to extreme weather events, which have had negative impacts on agriculture, crop yields and seed varieties.
Group chief executive Mr Morgan Nzwere, at an analyst briefing for the group’s financials for the year ended March 31, 2025, said the company sets its research goals every year and these are designed to address particular climate change challenges.
“All the research programmes are looking very much at coming up with drought-tolerant varieties that mature early,” he stated.
“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 added.
Mr Nzwere further indicated that the group is continuing to globalise its research and development to create varieties that perform well in unique environments outside Zimbabwe.
“Most of our research assets were based in Zimbabwe, but we are now strengthening regional research assets as well because it’s not all material made in Zimbabwe that does well in these other markets.
“We are strengthening our assets in East Africa. In West Africa, a new rice and yellow maize breeding station is under establishment,” said Mr Nzwere.
He also noted that this year, the group released a number of varieties in Malawi, Nigeria and Kenya, ensuring that the product basket remained broad enough to meet customer demand.
“We also released some wheat and sunflower varieties in Nigeria and Tanzania because we are seeing these markets becoming more important for these products,” said Mr Nzwere.
In terms of seed distribution, Mr Nzwere said the group is changing its model in response to the formal retail sector that is fast losing ground.
“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.
“We have opened our own shops and established sale points in the various outlets so that we can also have control in terms of cash,” he explained.
At the close of the year under review, the group had 21 of its own points of sale operational, one new shop in Kwekwe, four container outlets operational, and 16 rented tills in various retailers.
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.
He stated that maize remains the flagship product, contributing 88 percent of volume.
“Volume growth was achieved in Tanzania and Malawi despite stockouts, whilst volume dropped in Zambia, Kenya, Botswana and Mozambique. The group debuted 841 tonnes in Ethiopia,” said Mr Nzwere.
Group chief financial officer Mr Tineyi Chatiza said they achieved a 93 percent revenue growth to US$71,2 million from US$36,89 million in 2023. He added that the revenue growth was in line with volume, with maize contributing 68 percent and wheat 15 percent of revenue.
Of the total revenue,US$12.7 million were exports,which contributed 18 percent of revenue,and US$23,5 million was open market, contributing 33 percent of revenue. Mr Chatiza confirmed Government business and at least 90 percent of open market revenue are USD denominated.
He noted that overheads increased by 16 percent to US$26 million as costs hardened in USD, in line with business growth, and on account of Zimbabwean USD inflation.
Mr Chatiza said associates and joint ventures’ profit share tripled to US$3,7 million, with Seed Co International achieving a 15 percent profit after tax growth, while Quton’s profit increase was helped by foreign currency gains.
He also noted that the group has a strong balance sheet anchored by close to 100 hectares of land in Mt Hampden, which will be developed as the new city beckons.
