Importation of heifers is set to increase raw milk supply and product output

Business Editor—
GIANT milk processor and beverages maker, Dairibord Holdings, plans to import 500 heifers this year to boost raw milk supply and product output. Dairibord chairman Leonard Tsumba yesterday said the move was aimed at improving the company’s capacity utilisation and turnover with specific focus on exports to Zambia, South Africa and Mozambique.

“The gap between supply and demand of raw milk in Zimbabwe remains significant. In the circumstances, the group’s heifer procurement programme will remain a priority. To this end a target of 500 heifers for the 2015 financial year has been set,” said Tsumba in a statement accompanying the firm’s unaudited financial results for the six months ended June 30, 2015.

He said the heifer importation programme has contributed positively to the growth of the company, resulting in an eight percent increase in milk intake.

Tsumba said total raw milk intake for the group, which also operates in Malawi, grew two percent during the period under review.

“The intake for Dairibord Zimbabwe Private Limited increased by six percent while Dairibord Malawi recorded a 19 percent decline,” he said.

According to the Zimbabwe Dairy Services Department, national raw milk production in Zimbabwe for the six months to June 2015 increased with a marginal two percent compared to the same period last year.

Tsumba said the group has started benefiting from investments made in 2014 resulting in support for new product lines and resuscitation of constrained ones.

Sales volumes for the period grew by 25 percent driven largely by beverages, which were 63 percent above prior year following the launch of new products, he said.

“Liquid milks were one percent up over prior year due to disruptions on steri-milk production during the Chipinge plant refurbishment. Food volumes were flat on the previous period, impacted by weak demand due to declining disposable incomes,” said Tsumba.

During the period, the company’s revenue grew by a lower 10 percent to $47,9 million.

The firm attributed the mismatch in the growth of volumes and revenue to the general decline in prices realised as well as increase in the proportion of lower value, per litre beverages.

The group recorded an operating profit of $0,848 million compared to a loss of $0,627 million recorded last year.

Tsumba said the business unit in Malawi recorded improved performance after posting an operating profit of $35,000 from a loss of $402,000 in 2014.

Dairibord successfully refurbished the Chipinge steri-milk plant last year at a cost of $4 million. Its capacity is now 24 million litres per annum.

The factory was commissioned last month. The investment was accompanied by the unveiling of a new packaging for the product.