In a statement attached to its full year financial results to September, he said although the diversified agro-industrial concern secured US$3,8 million loan from PTA Bank, cheap imported poultry products on the local market hit the company.
The group recorded a turnover of US$73,3 million from US$30,5 million. The poultry division contributed US$30 million to total group revenue while specialised division brought in US$20 million with retail division chipping in with US$22 million.
Despite registering significant revenue growth in its poultry division, the unit posted a US$1,6 million loss.
“Competition from cheap imported products particularly against the poultry and specialised divisions products intensified in the current year arising out of the difference in pricing of genetically modified grains as opposed to more expensive non-GMO grains permitted in Zimbabwe. This resulted in margins and volumes remaining under pressure for the greater part of the year,” said Chihambakwe.
Early this year, poultry farmers lobbied government to impose a ban on imported meat claiming that it was produced from genetically modified methods, currently outlawed in Zimbabwe.
Government in April responded to the calls by introducing a three-month protectionist policy barring imported chickens.
The lifting of the ban of imported meat in August brought the poultry industry under the spotlight after local producers expressed dismay at the move it deemed as a setback to the development of local producers.
Stakeholders in the local poultry industry were of the view that they were being exposed to unfair competition as their counterparts, especially in South Africa, use genetically modified feeds, which are prohibited locally, to enhance growth.
Chihambakwe said the ban “gave the local industry some room to offload stocks which were piling up”.
But after the lifting of the ban, the company continued to move reasonable volumes of product with the abattoir operating at an average of 40% capacity, he said.
The group’s poultry division consists of Victoria Foods, Kobenhaven Logistics, Maitland’s Zimbabwe, Dore & Pitt and the retail sector has Farm & City, Town & Country and Honeydew Farm.
Hubbard Zimbabwe, the group’s breeding unit, grew to 100% capacity after the company imported “grandparent breeding stock” from Hubbard Europe.
Agrifoods volumes grew and gained market share. Total tonnage sold in the same period increased by 133% to 51 839 tonnes compared to last year’s sales of 22 209 tonnes.
The company says poultry feeds volumes grew buoyed by what the firm said was “popularity and viability” of small scale poultry projects.
Suncrest Chickens volumes were “adversely” affected by cheap imports. The company says production costs remained “higher” than the landed price of imports.
The group’s wholesale division Farm & City saw product range improving helped by better supplier relations while the retail unit — Town & Country — will remain under franchise to Afro-food.
On the PTA loan, Chihambakwe said funds would be channelled to re-capitatisation.