Online Reporter
Business Reporter
Dairibord HOLDINGS says it will continue to invest in initiatives to drive growth next year, with particular focus on enhancing processing capacity to expand the group’s market reach and sales volume.
Zimbabwe’s largest milk processor has been investing in capacity enhancement to support its growth ambition under a US$24 million capital expenditure programme.
“Commitment to innovation, dedicating significant resources to research and development, with the objective of growing a robust and diversified product portfolio, will be a key focus,” group chief executive officer Ms Mercy Ndoro said in response to questions.
She said the group would implement market expansion initiatives with special emphasis on export growth.
“Rigorous cost management strategies will also be implemented across the business to optimise operational costs,” said Ndoro.
Zimbabwean businesses flagged several challenges affecting their operations but still found ways to manoeuvre in the difficult environment to drive growth and invest in expansion.
Ms Ndoro said the implementation of a per-gramme sugar tax on beverage products resulted in a direct and quantifiable increase in production costs, given that sugar is a significant and essential raw material in the beverages sector.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube introduced the “sin tax” last year, as part of the Government’s initiatives to raise requisite financial resources to procure key health equipment.
But Ms Ndoro said the cost of production had significantly increased, making Zimbabwean products less competitive.
She added that Zimbabwe’s sugar tax had demonstrably exacerbated price sensitivity among consumers within the beverages sector.
She said the Government must consider making other taxes, such as intermediated money transfer tax, allowable for tax deductions.
During the course of the year, businesses have faced other challenges such as the high cost of power and supply deficit.
Ms Ndoro said to facilitate the transition to more sustainable energy sources, Governmental subsidies for industrial entities were critical.
“Furthermore, a concerted effort to rehabilitate critical infrastructure within the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) and Zimbabwe Power Company (ZPC) is imperative to augment energy generation and transmission capacities,” she said.
Notwithstanding the operational challenges, Dairibord demonstrated resilience by achieving growth in sales.
Overall sales volume for the quarter to September 30, 2024 grew by 29 percent, driven by milk and food product categories.
Liquid milk volume recorded a 32 percent year-on-year growth during the quarter, attributed to an increase in raw milk intake.
The foods category achieved a weighty 81 percent increase, while beverages grew by 22 percent compared to the previous
year.
“Cumulative sales volume for the nine-month period exhibited an 11 percent increase compared to the corresponding period last year,” the company said.
