eBusiness Weekly
Michael Tome
Business Writer
Dairibord says it is projecting volumes growth in the 2023 financial year, banking on recently completed capital investments.
In 2022 the company successfully completed capital projects that include the installation of a third maheu (Pfuko) line, a drinking yoghurt (Yoggie) line, and a third blow moulder for Steri Milk bottles.
During the 2022 period the company also installed a chilled water plant at the Harare Rekayi Tangwena factory as part of instruments to elevate production capabilities.
This all comes at a time when the business successfully launched its baobab fruit drink under the cascade brand in June 2022, as the commercialization of indigenous fruits gained momentum in Zimbabwe.
The prominent milk processor has cumulatively invested circa US$30 million into capital equipment in the last five years, positioning the company for sustained growth.
According to Dairibord, the investments are partly to augment the business’s capacity to export into regional markets, particularly in face of the African Continental Free Trade Area (AfCFTA) pact which intends to create a single market for goods and services on the continent by removing tariffs and other trade barriers between African countries.
AfCFTA will be the largest free trade area in the world in terms of participating countries number, covering a market population of 1, 2 billion people and a combined Gross Domestic Product (GDP) of over US$3 trillion.
Just last year Dairibord managed to export 7,7 million litres of goods into the region and beyond.
“Management will optimise the newly installed capacity for volume growth in 2023 and the group will continue to seek value-adding opportunities.
“We will leverage initiatives in raw milk production growth, our diversified product portfolio, effective pricing models, and route-to-market strategies for sustained growth,” said Company Secretary Maurice Karimupfumbi.
He said the firm will also insist on cost containment and reduction through improved productivity and efficiencies to enhance profitability.
In the first quarter to March 2023, Dairiboard’s sales volumes grew 14 percent ahead of the same period last year attributable to the aforementioned investments which were directed at boosting capacity.
The foods segment volumes took an eight percent dip while the milks segment raised by seven percent as beverages recorded a 20 percent growth.
Dairibord’s revenue in the first quarter of 2023 grew by 534 percent in historical terms while operating costs commensurately increased by 524 percent.
Resultantly there was a two percentage points improvement in the operating profit margin to six percent, up from four percent achieved in the same quarter last year.
In the quarter Dairibord processed 6, 863 million litres of raw milk which was seven percent ahead of the same quarter in 2022, accounting for 33 percent of the milk received by processors.
This growth directly translated into sales growth in the liquid milk division.
According to Dairibord, it aims to constantly enhance volumes of high quality raw milk through the Milk Supply Development Unit (MSDU).
The firm also intends to provide support to farmers in critical areas which encompass feed formulation and nutrition, veterinary support, and herd growth projects.
Zimbabwe continues to pursue aggressive milk production in order to attain competitive local milk prices, import substitution of milk powders, and opportunities for export growth.
