HARARE – National Foods Holdings is currently operating at 55% capacity and is looking to tap into the export market.
CEO Mike Lashbrooke said: “We currently export very little products but hope this will change with the new products we are going into.”
From a trading perspective, the year to date period has been a challenging one for the group. Volumes for the year to date at 418,000 tons declined by 5% compared to last year, “although after a very constrained first quarter (July to September), there has been a recovery in the last two quarters.”
The decline in volume has been mainly in the flour unit. This has been driven firstly by higher wheat prices globally which in turn have led to increased bread prices compared to last year, impacting bread consumption. Secondly, several new players have entered the flour milling market, heightening competition in the category.
Currently the group has invested US$5 million in a state of the art flour plant in Bulawayo that will be soon be commissioned. The plant will increase the production capacity to 2 000 tonnes.
The company is also working on a new pasta and biscuit plants in Harare. It is expected that these plants will be commissioned late in 2023. “At this stage we do not plan to expand beyond our existing production bases in Harare and Bulawayo as we are able to deliver country wide from these sites,” said Lashbrooke.
He also said the power cuts seen in recent months but which have now improved, had increased the cost of production as the group switched to alternative energy sources to keep their machinery on. “We have managed to maintain our production levels but doing so at a cost. Our operating cost have surged significantly.”
The company has a production capacity of milling 1 500 tonnes of wheat daily to produce flour without uninterrupted power supply and in a bid to maintain that, they have had to turn on their stand-by generators.
“We are looking at the possibility of establishing a solar power options but these investigations are at a preliminary stage so cannot provide details,” said Lashbrooke.