ZIMBABWE Stock Exchange-listed Seed Co has embarked on an aggressive debt collection exercise as it seeks to reduce outstanding payments for deliveries made to customers from US$56 million by at least 60% by year end.
Seed Co chief executive Morgan Nzwere told delegates at the company’s annual general meeting on Wednesday that the seed producer’s balance sheet was strong after collecting debt worth US$16,2 from customers and private players, and another US$23,7 million from government after the central bank issued treasury bills.
“The trade receivables were sitting at US$56 million by end of last year, basically we have collected US$16,2 million of that to date. Normally we expect to collect everything by year end but I would say because it includes amounts from other regional governments, so I expect us to collect up to 60%,” he said.
In the first four months of the year, Seed Co’s winter cereal sales went up 11% backed by the rebound in Zambia.
This was buoyed by twin factors where farmers exhausted carryover stocks and had to buy new stocks this year, as well as a flexible credit plan by the Zambian commercial farmers union under the Lima programme.
In Zimbabwe wheat sales are lower due to import parity issues, lack of concessionary finance and electricity challenges.
Nzwere said barley sales are non-existent due to breweries having adequate carryover stocks.
Last year French-based Lima grain increased its stake to 30% after injecting US$27 million in Seed Co.
The group chief executive said in the last quarter of the year the company will concentrate on selling 90% of maize and soya bean seed to its customers.
He said due to liquidity challenges besetting the economy, seed prices are expected to remain largely static.