Seed Co eyes more stake in SA market

Regional seed manufacturer, Seed Co International is targeting 10 percent share of the South African market, which will be achieved through its joint venture project with Limagrain and K2.

From July 2020, Seed Co’s operations in South Africa and eSwatini became part of the enlarged business entity, Limagrain Zaad SA, created from the merger of K2, Link Seed and Seed Co operations in these markets.

Seed Co chief executive officer Mr Morgan Nzwere told the company’s analyst briefing yesterday that the company will take up a 20 percent stake in the joint venture project.

“In eSwatini and South Africa what we have done with our business is that we have formed a joint venture with Limagrain and K2.

“We are targeting 10 percent market share in terms of the maize seed business as a joint venture,” he said.

“Seed Co will effectively have a 20 percent shareholding in that joint venture. The other parties, Limagrain and K2 will have the balance of the shareholding.”

Full-year turnover for the Botswana-eSwatini-South Africa operation is expected to be significantly lower than prior year after the merger of Seed Co’s SA & eSwatini operations into Limagrain Zaad SA.

But the benefits of the joint venture will show in the long run.

Limagrain Zaad SA was formed to create critical mass mainly in SA where a bigger balance sheet is required to advance research and development (R&D) in South Africa, which is Africa’s leading maize producer.

Meanwhile, for the half year to September 30, 2020, the group’s revenue jumped to US$27,9 million largely driven by head start sales activity in Malawi, Kenya and Zambia, as well as a good sales performance in Nigeria.

In Zimbabwe, the key contributor to the revenue upturn were local currency price adjustments that more than offset local currency depreciation.

On a comparative basis, management said year-to-date revenue is significantly ahead of the same period last year.

Finance costs for the period under review were down by US$0,1 million marginally to US$1,5 million attributable to rate concessions by banks due to Covid-19, and a decline in the overall debt position compared to the prior comparable period.

Seed Co International says it is seeking long-term debt to refinance long-term projects.

Mr Nzwere re-affirmed the group’s plans to take-over its Zimbabwean subsidiary, Seed Co Limited (SCL).-herald.clz.w