National Foods reports strong performance amid mixed divisional results

National Foods, one of Zimbabwe’s largest food manufacturers, has posted a robust performance for the financial year ending June 30, 2024, with total volumes reaching 585,000 tonnes, a 6 percent increase from prior year.

Despite several economic headwinds, including the rising cost of raw materials and regulatory challenges, the company’s diversified portfolio helped offset setbacks in certain segments.

Revenue for the year grew by 5 percent to USD 359.36 million, driven by solid volume growth, particularly in the maize and stockfeed divisions.

However, the company faced difficulties in its downpacking division, primarily due to the global impact of India’s rice export ban and the introduction of VAT on rice sales in the local market.

Edwin Manikai, the chairman of National Foods, reflected on the year’s performance, stating; “The Group’s revenue performance and operational efficiencies allowed us to share the gains with our consumers. While the increase in costs, particularly in the rice category, has had an impact, we are pleased to have navigated these challenges while continuing to drive growth in key areas.”

The Maize milling division saw a significant 21 percent growth in volumes, driven by reduced household maize stocks following a poor local harvest.

Manikai noted that the company’s focus on its flagship, Pearlenta brand and business-to-business channels, contributed to this growth.

He said; “Our strategic focus on Pearlenta and key Business to Business (B2B) segments is bearing fruit. We remain committed to serving the needs of local communities and industries in this vital category.”

Stockfeed also maintained its upward trajectory, growing by 8 percent year-on-year, with the poultry and dairy categories leading the charge. National Foods has been investing heavily in enhancing efficiencies at its Harare Stockfeed facility, and further upgrades are planned for 2025.

Manikai emphasised the importance of these investments: “We’re positioning ourselves for long-term competitiveness. Enhancing efficiencies in our stockfeed facilities will allow us to support our local farmers more effectively.”

In the Flour milling division, volumes remained stable compared to the previous year, but momentum is picking up as the company heads into the new financial year.

The company’s new flour mill in Bulawayo has significantly improved product quality and operational efficiencies. Manikai described this development as a “cornerstone” for the division’s long-term performance.

The Snacks division reported a remarkable 45 percent volume increase, driven by high demand for its “King” and “Zapnax” products. Production capacity was expanded, and the company plans to continue investing in this division to meet growing demand.

“Snacks have been a standout performer for us this year. We are excited by the consumer response to our products and see this as a category with significant growth potential,” Manikai said.

Despite the overall strong performance, not all divisions performed equally well. The Downpacking division, which primarily deals with rice and salt, saw a 21 percent decline in volumes.

This was due to a combination of rising rice prices following India’s export ban and local VAT imposition, which reduced consumer demand. The Biscuit division also struggled, with volumes down 23 percent, but the recent commissioning of a new world-class biscuit line in August 2024 provides optimism for future growth.

One of the most exciting developments for National Foods this year was the commissioning of its first large-scale commercial pasta line in Zimbabwe in February 2024.

The new pasta line, marketed under the “Better Buy” and “Primo” brands, aims to localize pasta production, reducing the need for imports and saving foreign currency.

“We are very optimistic about the pasta category,” Manikai commented. “The combination of local wheat production and our state-of-the-art facilities means we can now provide high-quality, locally-made pasta to Zimbabwean consumers.”

The Cereals division also showed growth, with volumes increasing by 8 percent as new product introductions made inroads in regional markets.

Looking ahead, National Foods is well-positioned for further growth, thanks to ongoing investments in key categories and its focus on operational efficiency. While some divisions face challenges, the company’s diverse portfolio and strategic investments suggest a positive trajectory for the future-ebsinessweekl