ZIMBABWE’S largest milk processor Dairibord Holdings Limited (DZL) says it has spent almost US$4 million on upgrading plant and equipment in the current year as it seeks to improve efficiency and competitiveness.
Report by Taurai Mangudhla
Speaking on the sidelines of the company’s annual general meeting last week, Dairibord CEO Antony Mandiwanza said the capital was spent across the group’s strategic business units including Daribord Malawi.
“I think it would be difficult to give you a fine figure but we are looking at close to US$4 million so far for the whole initiative for the whole group,” Mandiwanza said.
“Remember that incorporates other areas such as the distribution department NFB Logistics, where we have bought new vehicles, some of which are coming this week for our distribution services.”
Mandiwanza said the company had so far spent US$1,5 million on plant upgrade at Lyons Maid Zimbabwe alone.
The group plans to introduce new products and improve its packaging in the current year.
“We have done a lot of work on peanut butter, Rabroy tomato sauce, Rabroy salad cream and we continue on the research and development programme,” he said.
Giving a trading update, Mandiwanza said the group’s turnover was flat, recording a marginal growth of US$24,3 million for the first three months of the year ended March 31 compared to US$24,2 million in the same period in 2012, after a rationalisation programme undertaken towards the end of 2012.
The rationalisation exercise, which has cost close to US$1 million, and seen the work force reduced by 200, is expected to result in net savings of US$1 million per annum.
DZL’s volumes declined to 16 046 million litres of milk in the period under review from 16 250 million litres in the first quarter of 2012. Raw milk intake increased to 6,6 million litres for the first quarter, compared to 6,58 million litres during the same period in 2012.
The company said milk supply in the country remained low in the country, resulting in the group importing milk powders to augment supply.
“The national milk production requirement is 8 million litres per month and currently, Zimbabwe is producing 4 million litres, leaving a gap of 4 million litres,” Mandiwanza said, adding the shortfall was a result of depletion of the national herd.
“The national herd has been depleted significantly. At peak around 1990 we used to have 197 000 dairy cows at different stages, of which 75% were in milk production stage, but today we have less than 26 000 dairy cows”.
Mandiwanza said Dairibord was currently importing heifers for allocation to farmers as part of an initiative to increase national milk production.
The project is expected to contribute 10% of milk supply in the current year.
In the long run, the project is expected to see adequate local raw milk supply and lower prices from the current 62 US cents per litre compared to below 40 US cents price paid by regional producers.