Natfoods growth has, since dollarisation, been funded entirely from internal resources in the form of retained profits and limited borrowings
Golden Sibanda Senior Business Reporter
NATIONAL Foods Limited has invested over $20 million into upgrading operations since dollarisation in 2009 with an additional $8 million earmarked for further capitalisation by June this year.
Newly appointed chief executive officer Mr Mike Lashbrook said the bulk of the expenditure had gone towards upgrading the food processing giant’s Harare and Bulawayo’s flour milling plants.
“The bulk of the total spend of just over $28 million has been spent on our Flour plants in Harare and Bulawayo, where total investment will be $9 million by June 2015,” Mr Lashbrook said yesterday.
Natfoods growth has, since dollarisation, been funded entirely from internal resources in the form of retained profits and limited borrowings. The firm closed last financial year with no borrowings and is well positioned to fund its future growth ambitions.
The group plans to fund further growth initiatives through retained profit and moderate levels of borrowing with new products lines planned to consolidate its position. The agro-processor said the process of continual improvement is never complete and it was roughly half way through a major 4 year programme to upgrade flour mills with the significant upgrades to stock feed plants set to be complete by end of this year.
“National Foods is considering potential investments across a number of food products. Unfortunately we cannot reveal our specific intentions until these have been approved by our board,” said Mr Lashbrook who recently took over from Mr Jeremy Brooke.
Mr Lashbrook said Natfoods has “focused intensely on improving efficiencies across all areas of the value chain to ensure that we produce good quality, affordable products”.
This has guaranteed a market for its products in the face of cheap and at times low priced imports that have crowded out the majority of high quality but expensive local products.
In the year to June 2014, Natfoods registered 11 percent growth in revenue at $344 million while profit after tax jumped 20 percent to $16,8 million from $13,9 million in the prior comparative period.
The new CEO said short to medium term priorities entailed consolidating the group’s position as the leading supplier of basic foodstuffs in the country through further investment into the existing operating platform and human skills to improve offerings to customers.
Currently, overall group capacity utilisation across group operations is running at 46 percent. Mr Lashbrook would however not be drawn into commenting on capacity for specific divisions.
Despite challenges the local agricultural sector has faced Mr Lashbrook said the group prioritises grain procurement from local farmers to contribute to the upliftment of the economy.
“The Group continues to play an active role in supporting local grain farmers with its schemes having produced 15 000 metric tonnes of maize and soya beans in the 2013/14 season and a further 25 000MT wheat in the just ended wheat season,” he said. Natfoods said it only considers procurement from outside the country in cases where there is inadequate local product .