HARARE – National Foods recorded a 2.4% decrease in volumes for the third quarter ending 31 March at 131,000 tons compared to last year. However excluding maize, volumes increased by 35%.
The price stability, along with increased real incomes in certain sectors of the economy saw an improvement in consumer demand influenced the performance of the group.
According to the group’s Q3 trading update, the maize division has had a difficult year due to imports that flooded the market due to depressed local production.
“This has largely been due to the substantial volumes of maize meal imports from South Africa, particularly into the south of the country. These imports have subdued volume performance and impacted margins,” he said.
The company is also benefiting from the introduction of foreign currency auction and the ability to receive foreign currency payments from customers which enabled demand to be recovered in the flour division resulting in a 46% growth on year to year basis.
Stockfeed volumes increased by 27% driven by increased demand for protein products, notably in the poultry segment. The most recent quarter saw growth slowing as demand for beef feed declined on the back of improved pastures.
The groceries division sustained its growth trend, with year to date volume growth of 95%, driven largely by rice and salt while the Snacks and treats unit saw volume increase of 44% for the year to date.
The growth in these division were experienced despite the COVID19 restrictions and reduced shopping hours which had dampened demand in these categories.
The group anticipates continued growth due to increase in consumer demand on the back of the improved harvest which should drive further improvements in consumer spending power.
The company welcomed the USD denominated facilities now being offered by financial institutions while bemoaning the high cost of borrowing in local currency.
National Foods is also optimistic of the future, as the country has enjoyed an excellent cropping season, with production of most key grain crops expected to significantly exceed the levels achieved in recent years. On the back of this harvest, National Foods expects to source all of its maize requirements locally over the coming 12 months cutting down on its foreign currency demands.