Oliver Kazunga, Business Reporter
AGRO-INDUSTRIAL concern, National Foods has milled 48 000 tonnes of maize meal under the Government’s subsidised mealie-meal programme, which helped boost the company’s volumes in the period ended March 31, 2020.

Towards the end of last year, the Government introduced subsidised roller meal and millers were contracted to produce the mealie-meal.

In a trading update for the nine months ended March 31, 2020, Innscor Africa Limited said its subsidiary, National Foods, made use of raw materials supplied by the Grain Marketing Board (GMB) as well as its own imports to support the programme.

It said National Foods’ maize division performed well with the nine-month volumes marginally ahead of the comparative period while from a quarterly perspective, third quarter volumes grew 49 percent over the second quarter of the financial period under review.

“National Foods has played a key role in Government’s subsidised maize meal programme, with 48 000 tonnes having been milled up to the end of March 2020.

“The company has utilised raw materials supplied by the GMB as well as its own imports in support of the programme,” said Innscor.

It said Mutare and Masvingo maize mills were operational during the quarter, with the resuscitation of Masvingo noteworthy since the mill last operated in 1998.

“Pearlenta Nutri-Active, a maize-based breakfast cereal, was launched late in 2019 and has been very well accepted by the market,” said the group.

On the flour division, the company recorded a volume decline of 42 percent in the nine-month period under review as measured against the comparative period. This was largely a result of the progressive removal of subsidies in this particular value-chain, leading to reduced demand for bread and flour-based products in general.

The group said volumes have now stabilised, with a 10 percent increase recorded between second and third quarter of the current financial year.

“Nine-month volumes in the stockfeeds division for the year to date were down 20 percent versus the comparative period, largely in line with the overall market performance, while volumes in the groceries and snacks and treats divisions declined by 34 percent and 27 percent, respectively, over the same period,” it said.

National Foods is holding a solid stock of raw materials, although subdued local liquidity and continued devaluation mean that replacement of this pipeline remains a critical management focus area in the short to medium term. On the bakeries side, volumes for the cumulative nine-month period were 40 percent behind those recorded in the comparative period. The above decline was largely a result of the progressive removal of subsidies in the wheat-to-bread value chain and the consequent normalisation of pricing.

“With subsidies in the value chain now having been largely removed, volumes have now stabilised, showing a four percent increase from second quarter to third quarter in the current financial year,” it said.

At Natpak, Innscor said the subsidiary continued with its consistent growth trajectory, delivering a 21 percent increase in overall volume growth for the nine-month period over the comparative period. This was achieved largely due to the performances of the recently added rigids and corrugated divisions.

“Volume performance in the third quarter was marginally behind that of the second quarter and this was due mainly to a slightly delayed off-take of product within the corrugated division.

“Initial production capacity in the recently introduced rigids division has been quickly reached, and a further investment in this category has been made with commissioning due in the early part of financial year 2021.”

At Prodairy, performance continued to be positive, and for the nine-month period, volumes increased by 18 percent over the comparative period. Third quarter volumes were similar to those recorded in second quarter.

“Very encouraging performances have been recorded in some of the recently introduced categories such as dairy blend juice, maheu and butter, which has rapidly become the market leader in its category, operating under the “Life” brand.

“Raw milk intake continued at 20 percent of national production, and this continues to form a major part of the company’s future growth strategy. We continue to investigate opportunities to enhance raw milk supply using a combination of the existing grower base and in-house production,” said Innscor.

Nine-month volumes at Probottlers were 17 percent below those recorded in the comparative period and as noted in the interim report, this was largely due to exceptionally poor power supply at the unit during the early part of the financial year.

Following the installation of additional power generating capacity, demand has remained strong in both the cordial and carbonated categories and overall volumes increased by 11 percent from second quarter to third quarter in the current financial year.

Volumes at Innscor Africa’s other subsidiary, Profeeds for the nine-month period declined by 31 percent against those recorded in the comparative period, while third quarter volumes showed a decline of nine percent against second quarter in the current financial year.

“This operation primarily services the small-scale farming sector and the volume performance is a reflection of subdued consumer spending and the knock-on effects of lower agricultural production following the devastating drought conditions.

“The upgrade of the “Profarmer” retail network into an all-encompassing agricultural outlet continues with pleasing results achieved in face-lifted stores,” said the group.

At Probrands, Innscor Africa said volumes were 18 percent down for the nine-month period as measured against the comparative period.

“This was largely due to a depressed performance in the first half of the financial year, but there has been an excellent pick-up in third quarter where volumes increased by 30 percent over both second quarter and also the comparative quarter,” it said.

Volumes at Colcom for the nine-month period under review were 13 percent behind those recorded in the comparative. While fresh pork sales continued to show good growth at 13 percent, processed and other ancillary products were 29 percent lower over the same period.

“Pig production continued to improve following the investments made to enhance volumes, with total pigs processed in the nine-month period increasing by six percent over the comparative period,” said Innscor Africa.

Pig supply is now at an all-time high and in excess of 2 000 per week and focus was on ensuring adequate levels of stockfeed are in place in order to maintain production levels.

Innscor Africa said, performance at Irvine’s for the nine-month period under review was largely driven by the performance of the table egg category, which showed a 14 percent increase on the comparative period.

“The frozen chicken category was, however, 13 percent behind the comparative period, and day-old chick volumes declined by 25 percent as small-scale farmers reduced operations in response to current economic conditions and diminished crop yields.”

From a quarterly perspective, overall volumes in the third quarter were marginally ahead of those recorded in the second quarter.

“With the downturn of local day-old chick demand, the export of hatching eggs continues on a limited scale, whilst investment in automation within the layer operations continues,” said Innscor Africa. — @okazunga