Padenga mulls diversifying operations

ZIMBABWE Stock Exchange-listed firm, Padenga Holdings, is considering a transaction that will see it diversify operations to grow exports and complement traditional crocodile skins and meat production.

In a recent cautionary statement, the crocodile breeding company advised shareholders: 

“Further to the cautionary announcement published on the 9th of April 2019, Padenga Holdings Limited is still considering a proposed transaction to diversify its business through investment into an alternative export orientated business. This diversification will not result in dilution of existing shareholders of Padenga Holdings Limited”.

So far, transaction advisors had been engaged and developments would be communicated to shareholders in due course, it said.

“In the interim, shareholders are advised to exercise caution in dealing with their Padenga shares”.

The group is on record as having indicated plans to venture into agriculture, with particular interest towards avocado and macadamia production in the Eastern Highlands. 

It is believed that the macadamia and avocado business would go a long way in enhancing Padenga’s revenue base.

According to ZimTrade, the major destination markets for avocados produced in Zimbabwe are the Netherlands and the United Kingdom. At present the group exports crocodile skins and meat to Europe and Asia. 

Locally, Padenga, formerly a division of Innscor Africa Limited, was listed in November 2010 and owns Kariba Crocodile Farm, Nyanyana Crocodile Farm and Ume Crocodile Farm all in Kariba. 

The global financial crisis of 2008, and the resultant contraction in exotic skins markets worldwide, forced a rethink of the company’s strategic focus and consequently a new business model was adopted that placed absolute emphasis on producing fewer but top quality skins for premium luxury brands.

“This change in strategy, where we now assess our skin quality in terms of the overall proportion of our production sold to manufacturers of high end luxury goods, has proved to be the cornerstone of our success,” said the company. 

“We no longer chase volumes, but understand that the premium market will pay for the skin quality that is consistent with their brand status and image.

“Consequently our production volumes deliberately decreased from 63 500 skins in 2009 to 43 000 skins annually, and this reduction in stocking density provided the improved growth and increased skin quality that set us apart from the majority of other producers.”

Each of Padenga’s farms has the capacity to produce 14 300 skins per annum and they have over the years produced crops of identical quality, emphasising the strength of the operational systems employed. 

The group has over the years invested considerable amounts of capital into the operational and administrative infrastructure on the three farms. 

And to facilitate infrastructural development projects at the farms, Padenga said it sets aside significant amounts of funding each year for repairs and maintenance. 

The company also sets aside budgets for capital expenditure projects aimed at facilitating expenditure and improvements at the farms.