HomeBusiness DigestDairibord pours US$6m into expansion projects

Dairibord pours US$6m into expansion projects

ZIMBABWE’S largest milk processor, Dairibord Zimbabwe Ltd (DZL), has embarked on a US$6 million expansion project which could double production capacity for its non-alcoholic malt beverage, Pfuko Maheu, and long life milk plants.

By Taurai Mangudhla

The Zimbabwe Stock Exchange-listed company said the plants will also produce and package Supermilk, which is primarily for export, as well as juice blends.

According to information gathered by businessdigest, a team of foreign engineers have been in the country for the last three months installing and testing the new plants that are expected to boost production.

In responses to businessdigest’s enquiries, DZL said the company in July this year made a US$2 million investment to bolster production capacity for Dairibord Pfuko-Udiwo Maheu from the initial 2014 investment.

The expansion of the maheu plant entails additional processing and packaging of Pfuko-Udiwo which will double the annual production capacity from the current 25 million litres per year, the company said.

“In view of this investment we have developed and launched four additional flavours under the Dairibord Pfuko-Udiwo Maheu brand namely Strawberry, Banana, Buttermilk and Chocolate flavours (and) DZL continues to expand and innovate its offering to meet merging consumer needs,” said the company.

DZL has also invested in a new state-of -the-art cartonised long-life milk processing and packing line which will see the company packing Dairibord Chimombe full-cream and low-fat milk in a 1litre carton in Zimbabwe in addition to the 500ml and 250ml sachets.

This, the company said, will allow for consolidation of market share in the UHT long-life milk category.

“In addition the plant will process and pack the Dairibord Supermilk which is targeted for the export market. The plant has capacity to process 3,5 million litres of milk per month while at the same time meeting both local and export demand,” said the company.

The current UHT long-life milk processing capacity is 12 million litres annually. This is in addition to the annual capacity of 25 million litres for the Sterilised long life milk plant commissioned in Chipinge in June 2015. The target for UHT production is 60 million litres per annum.

“Dairy juice blends and 100% fruit juices in cartons will be packaged by the same machine. The total investment on the cartonised milk equipment is US$3,5 million,” added DZL.

DZL confirmed engineers from various European and South African suppliers were at the company’s Harare and Chitungwiza factories working on the two mentioned projects, adding the Maheu project has been commissioned with the milk based flavoured variants already available on the market, while the cartonised Chimombe plant will be commissioned shortly.

The company said its current capacity utilisation on the Maheu line stands at 100%, adding the goal is to ensure that the additional capacity is utilised to deliver minimum 90% though this may be affected by the consumer pull in the market.

“As for the cartonised milk, we target to achieve above 70% production capacity utilisation as the line will also be used to pack the dairy juice blends and 100% fruit juices,” added DZL.

Revenues for 2016 are seen flat despite a projected 10% slide on the price per litre of milk sustained by an anticipated 10% volume growth, CE Anthony Mandiwanza said at the company’s 2015 results briefing.

Mandiwanza said the volume growth would be driven by investments into the Chimombe carton, additional capacity on the Pfuko production line, product promotions and tapping into opportunities in the informal sector.

In year ended December 2015, the company reported a 281% after-tax profit growth to US$2,3 million for the year-ended December 2015, up from US$604 000 prior year mainly driven by new products and cost-cutting measures.

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