HARARE – ZSE-listed seed producer, SeedCo limited recorded substantial growth in sales volumes during the nine months to December and Q3-23 thanks to government’s wheat program which resulted in the group realizing record local wheat and soya beans sales.
Seed Co is in the business of developing certified seed species that include hybrid maize, wheat, soya bean, beans, rice, potatoes, sorghum, cotton, and vegetables.
Last year the Government aimed at increasing wheat production to meet the national requirement and embarked on a wheat scheme which involved public and private actors to supply inputs and provide financial resources to farmers. Resultantly, the scheme was over-subscribed leading to 80 883 hectares of land planted wheat against an initial target of 5 500 hectares.
Soya bean production has also been on the rise after government pushed industry to finance for the production of the commodity locally to save foreign currency.
In its latest trading update, Seedco volume increased by 14% over the past 9 months compared to the same period prior year, and by 46% compared to the same quarter prior year, which was also helped availability of ample stocks, exports and favorable rainfall projections towards the start of the main planting season.
The company acquired a state-of-the-art maize conditioning plant in the previous financial year and this has been crucial in ensuring the availability of stocks. At the end of H1 the business had 15,500mt tonnes of maize seed in stock across all varieties.
In line with volume growth and the evolution of the ZWL/USD exchange rates, the group revenue subsequently grew by 425% during the 9 months and 516% during the quarter compared to same period prior year in historical cost terms.
Notwithstanding improved earnings, group operations continue to be hamstrung by several challenges on the domestic market.
“Some of the major challenges the business is dealing with include the ongoing energy crisis, the lack of and high cost of fertilizers and agrochemicals, the loss in consumer purchasing power, and the shortage of liquidity in both local and hard currency,” said the group.
On the regional front, the group continues face headwinds as encountered during the first half of the year from its associates which recorded sales reduction in Malawi and drop in revenue in Nigeria due to product unavailability as well as in East Africa due to drought.
The company is set to migrate to the VFEX after announcing decision to exit the ZSE earlier this month.