HARARE – National Foods is planning to spend $8,3 million in 2015, nearly 50% of it in expanding its flour unit that has become its main growth driver, the acting chief executive said yesterday.
Michael Lashbrook told shareholders attending the firm’s 45th annual general meeting at its headquarters in Harare that volumes in the first quarter to September were up by 6% on last year’s figures, driven by increased demand of its flour products.
“We had a good quarter in flour business. Maize was a little bit behind than what we had expected,” Lashbrook said.
On the year ahead, Lashbrook said the firm would roll out an aggressive capital expenditure programme, fixing the operating platforms.
“We are planning to spend $8,3 million dollars in the coming year in capex, in which the bulk of it will be in our flour business unit,” he said.
“We are spending just over $4 million on fixing of flour platform and that’s part of the ongoing capex programme to repair that platform.”
Lashbrook said the company closed the previous year strong in a financial position with no borrowings, leaving it in a strong position to target at least a 5% growth.
On procurement, he said maize purchases were difficult in the wake of the statutory instrument (SI) 122 which criminalised the purchase of maize below a producer price of $390, making Zimbabwe maize the most expensive in the world.
“To date we have bought 20 000 tonnes of maize at the new price and with the Grain Millers’ Association, we continue to work with the authorities to find a sustainable solution to the issue of maize pricing,” he said.
Lashbrook reassured shareholders that the company had adequate wheat stocks to sustain the business in the financial year.
“I just want to reassure all our stakeholders that we have plenty of wheat. We supported local farmers to the tune of 5 000 hectares and we are targeting 25 000 tonnes of local wheat from that scheme as we speak. We have imported wheat coming in at the moment so all is in order there.”
National Foods is an associate of Innscor Holdings.
– The Source