HAVING recorded an increase in operational costs of 228% to $74,5 billion compared to last year’s figure of $22,8 billion in its half-year results, Seed Co has announced
a restructuring exercise for its operations.
In the period under review, the company’s local operations recorded a turnover of $48 billion while regional operations closed the half year at $17 billion.
The company currently has operations in Zimbabwe, (including an Export Processing Zone affiliate), Zambia, Malawi, Mozambique, Botswana, and Uganda and has a joint venture operation with Syngenta in South Africa.
In its half-year results announced on Tuesday, the company said they will be restructuring operations in a move aimed at reducing operational costs.
Seed Co chairman, Nick Nyandoro, said proposed changes in its operations were meant to be effective in cost-reduction.
“Consolidation of the company’s activities is going on and the result of this will be felt in the form of a sizeable reduction in costs,” Nyandoro said.
He said the company was expecting a significant improvement in the quality of its seed owing to the completion of work on its treatment and handling facilities.
“Work already done on strengthening the company’s seed handling and treatment facilities is set to pay dividends this year as quality and response times will be improved,” said Nyandoro.
He said the seed company was still working on an improved distribution system to boost sales volumes.
“At the same time, retail and distribution networks continue to be developed and will strengthen this important part of our sales strategy,” Nyandoro said.
He said the company has had positive response from supply contracts tendered in the region, a situation which has also been bolstered by high stocks of its produce.
“The group is well-stocked and resources to distribute the large quantities of seed it is holding are available. Demand is strong and considerable success has been scored in tenders across the region,” said Nyandoro.
The seed company chairman however said the supply situation for local seed will remain depressed due to the current drought and input shortages experienced by its growers.
“Seed deliveries in Zimbabwe are expected to be down owing to the drought and shortage of inputs experienced by our growers based in Zimbabwe,” Nyandoro said.
He said the company was this year set to introduce new seed varieties for maize, wheat and soya-beans developed by its research departments.
Nyandoro said a breakthrough had also been made in the areas of maize suitable for lowland tropical regions in the form of quality protein maize and rust resistant soya-beans.
“The group’s research programme continues to expand and significant breakthroughs have been made in the areas of maize for lowland areas, quality protein maize and rust resistance in soya-beans,” said Nyandoro.
“Several varieties of maize, wheat and soya-beans have been proposed for release this year,” Nyandoro said.
Seed Co recorded a loss before tax of $5,2 billion for the half year while its fixed assets closed at $167 billion, mainly attributed to the exchange rate movement as well as plant and equipment additions.