The Sunday Mail
Livingstone Marufu
LISTED food processor, National Foods (NatFoods), a subsidiary of Pan-African industrial behemoth Innscor Africa Holdings, recently slashed bakers’ flour prices from US$31 per bag to US$29 as operating efficiencies resulting from increased production began to have a telling effect on product pricing.
The replacement of imports with local products, which has resulted from the introduction of Statutory Instrument (SI) 64 of 2016 — a law that restricts the import of goods that can ideally be produced on the local market — has resulted in NatFoods realising “volume increases across a number of its categories where imports were previously prevalent”.
Flour mills in Harare and Bulawayo are now operating at 100 percent capacity.
NatFoods chief executive officer Mr Michael Lashbrook told The Sunday Mail Business that the company can now meet local market demand.
“Since the introduction of SI 64, National Foods has seen volume increases across a number of its categories where imports were previously prevalent.
“As an example, volumes in our flour business are currently 30 percent up on last year and our flour mills in Harare and Bulawayo are operating at maximum capacity. In a similar vein, our rice business has also seen strong volume increases.
“Increased throughput improves the operating efficiencies of the business and allows us to lower prices to the consumer.
“We have been able to reduce standard Bakers Flour prices from US$31 per bag to US29 per bag in the last few months,” said Mr Lashbrook.
Separate unit for depots
Plans are underway to create a strategic unit to manage the company’s depots, which have since increased from less than 20 in 2009 to 60 in 2016. The deposits will be rebranded to “Gain Cash and Carry” and will gradually be transformed to fully-fledged wholesalers.
Yesterday, Mr Liberty Murimwa, the former finance director, and Mr Johnson Gapu, ex-sales and distribution manager, took over management of the new unit.
Depot employees will be moved across to the wholesale division, while new employees will be recruited as the business grows.
“Since dollarisation, National Foods has expanded this network of depots extensively as a way of getting our product to the consumer in all corners of the country.
“In recent years, as wholesalers have expanded their footprint, alternative options of getting NatFoods’ goods to market have become available.
“At times our customers have felt that these depots are competing with them. Because of these reasons, Natfoods has decided to exit the depots.
“NatFoods will cease to have any interest in the depot network,” explained Mr Lashbrook.
For the full-year ended June 30, 2016, National Foods reported a 13 percent increase in total volumes to 560 000 tonnes and a 5,2 percent rise in revenue to US$330 million driven by gains in the flour and maize divisions.
Net income rose from US$12,7 million a year ago to US$14,3 million. Growth was also underpinned by increased volumes, effective procurement and operating efficiencies in plants.
During the course of the year, NatFoods completed the acquisition of a 40 percent non-controlling stake in Pure Oils, which produces cooking oil and as well as protein oil cakes used in production of animal feed.
Experts bet that improved local manufacturing will be a boon for farmers as it creates a larger market for locally grown maize, wheat and soya beans.
