Chronicle Editor
Pride Mahlangu, Business Reporter
SEEDCo Limited has secured from a supplier in Denmark equipment for an Artificial Maize Seed Drier it plans to erect despite funding constraints to implement the project within the stipulated time frame.
In June last year, SeedCo announced the intention to commission its long-awaited Artificial Maize Seed Drier in Harare this month.
The setting up of the drier has been necessitated by the company’s determination to curb seed post-maturity losses and further advancing processed seed market readiness.
In a trading update for the third quarter and nine months ended December 31, 2019, SeedCo company secretary Terrence Chimanya said:
“SeedCo is continuing with its major project of constructing a flagship Artificial Maize Seed Drying Plant at the company’s Stapleford Complex just outside Harare.
“The construction project is progressing with all equipment having been received from the supplier in Denmark.
“Construction progress is, however, at a slower pace than originally anticipated due to funding challenges.”
Meanwhile, in the trading update for the period under review, Mr Chimanya indicated that his firm’s sales volume performance was down by 24 percent in a cumulative nine months ended December 2019 compared to the same period in 2018.
He said sales volumes for the third quarter ended December 31, 2019 dropped by three percent to the comparative period the previous year.
The reduction in sales volumes in both the third quarter and nine months to December 31, 2019 was mainly due to low onset of the season and unfavourable weather forecasts which discouraged farmers from purchasing seed, negative impact of low disposable incomes on consumer demand, as well as reduced Government uptake of seed.
Fuel shortages affected land preparation by farmers during the current summer season. Electricity and water shortages also incapacitating wheat farmers from growing the crop under irrigation last winter.
Mr Chimanya said SeedCo’s sales volumes are expected to close the current financial year lower than the prior year due to the aforementioned challenges.
He said the seed producer anticipates to remain profitable despite the adoption of the new standard on leases by SeedCo during the reporting year.
On the policy front, Mr Chimanya welcomed the reduction in input tax (VAT) from 15 percent to 14,5 percent effective January 1, 2020 as well as the reduction in effective Corporate Income Tax including three percent Aids levy from 25,75 percent to 24,72 percent but said the positive impacts are at risk of being eroded by inflation.
The coming of legislation allowing electricity to be levied in foreign currency for certain players in the economy could improve power supply from imports going forward, he said.
He said SeedCo continues to implement measures to preserve value in a challenging environment. Under the prevailing operating environment, he said his organisation managed to secure funding to pay for all seed deliveries from growers and funded the processing of the seed in readiness of the selling season.
“Striking a balance between cost-containment and continuing in business (operating and retaining skills) profitably is now part of the company’s challenging daily routine,” said Mr Chimanya. — @pridesinstinctz.
Online Reporter