Natfoods cuts costs, grows output
Natfoods has increased investments towards local production of raw materials used in its manufacturing operations.
Food processing giant, National Foods Holdings Limited, says it is paying attention to cost-cutting while optimising production as the group expects to see continued volume recovery thisyear in line with analysts’ forecasts.
This comes as group volumes for the half year to December 31, 2021 increased by 15 percent compared to the same period in the prior year.
Among other strategies, the group is cutting on raw materials costs through increased support towards contract farming. During the half year period to December 31, 2021, the group increased hectares planted under its contract farming initiatives by 22 percent, compared to the same period in the prior year.
The group has already indicated various products grown under its contract farming scheme now constitute a significant portion of its raw material requirements. Chairman Todd Moyo said National Foods continued to keenly support contract farming of maize, soya beans, wheat, sugar beans, sorghum and popcorn.
“During the current summer season around 11 000 hectares have been planted, representing a 22 percent increase compared to last year.
“In addition to this, 27 000 tons of wheat was delivered on last winter’s cropping programme. The various products grown under this programme now constitute a significant portion of the group’s raw material requirements,” said Mr Moyo in a statement accompanying the group’s financials for the half year period.
Mr Moyo added the group will also pay attention to the cereals category with a US$4 millioninvestment made towards this business segment.
He said: “As previously advised, the board has approved further investment into the cereal category which will allow the group to further expand its repertoire of breakfast cereals and extruded products.
“This investment amounts to US$4 million and is set to avail an exciting range of affordable and nutritious breakfast cereals to the market. The project is on track to be commissioned mid 2022.”
According to the group, the first phase of the cereal investment has seen the introduction of a variety of products over the past year including Pearlenta Nutri-Active instant maize porridge, Better Buy Soya Delights, and more recently a Smart Carbs range of instant breakfast cereals.
During the half year period, total volume for the period increased came in at 304 000 tons, which was 15 percent firmer compared to the prior period . Revenue for the period rose 96 percent to $24,9 billion, driven by volume growth and inflationary price increases.-The Herald
