Dairibord milks its way to success
DAIRIBORD Holdings says it is committed to enhancing its processing capabilities through targeted capital investment initiatives designed to increase market penetration and boost sales volume.
This strategic decision underscores the company’s dedication to improving operational efficiency and expanding its presence in the competitive dairy market.
Recently the firm indicated that its toll manufacturing project in South Africa is at an advanced stage and is anticipated to enhance foreign currency earnings.
It also aims to augment its product offerings that cater for a variety of consumer needs.
Dairibord’s approach is aligned with its goal of increasing export opportunities, further strengthening its market position both locally and internationally, by optimising its operations through effective cost management strategies and ongoing staff development programs.
This comes as the group recorded a 44 percent increase in its raw milk intake during the nine-month period ending September 30, 2024, as it collected 11,8 million litres compared to the 8,2 million litres during the same quarter last year.
The growth rate exceeds the national average milk intake increase of 16,7 percent among processors during the same period, with Dairibord accounting for 36,7 percent of the national raw milk production.
“The business will continue with its growth agenda focusing on the enhancement of processing capabilities through capital investment initiatives aimed at growing market penetration and sales volume,” said Dairibord Company Secretary Maurice Karimapfumbi in a trading update for the nine months to September 2024.
This comes as the group encountered sustained operational challenges in the operating environmental, including currency volatility, exchange rate disparities, and implications of sugar tax on cost and pricing structures.
However, sales volume experienced a notable year-on-year increase of 29 percent during the quarter under review, largely driven by robust performance in the Milks and Foods product categories.
Specifically, the Liquid Milks segment recorded a 32 percent growth in volume, attributable to a significant rise in raw milk intake.
This surge indicates an effective response to consumer demand and an increase in production capacity while the Foods category posted an 81 percent growth, highlighting strong consumer preference.
Meanwhile, the Beverages category demonstrated a commendable growth, increasing by 22 percent compared to the same period last year.
Dairibord’s cumulative sales volume over the nine months, posted an overall increase of 11 percent relative to the same timeframe in the previous year.
The Beverages category accounted for a substantial 60 percent of the total volume sold, establishing its dominance in the market, followed by Liquid Milks and Foods contributing the remaining 9 percent.
Financially, revenue for the quarter surpassed the corresponding period last year by an impressive 37 percent, primarily propelled by the uplift in sales volume.
Cumulatively, revenue for the nine-month period grew significantly by 22 percent, amounting to US$91, 6 million attributed to a favourable combination of increased sales volume and an enhanced product mix that likely catered to evolving customer preferences.
In terms of currency dynamics, the percentage of total volume sold in United States Dollars decreased notably from 93 percent to 74 percent during the quarter compared to the same period last year.
Conversely, for the cumulative nine-month analysis, the volume sold in United States Dollars experienced an increase from 74 percent to 81 percent, indicating a positive shift in the currency’s role in transactions.
Exports accounted for five percent of total sales volume in the third quarter, a decline from the 11 percent contribution recorded in the prior quarter.-ebsinessweekl
