Innscor Africa maintains quarterly volume growth

Innscor Africa Limited sustained volume growth across key segments during the quarter to March 2025, the company reported in a trading update, even as margin pressures persisted during the review period.

The conglomerate said it leveraged currency stability in the period to optimise pricing and boost consumer sentiment.

“Despite the ongoing cost-push pressures and elevated interest rates, we have managed to sustain volume momentum across our manufacturing portfolio,” said Andrew Lorimer, Innscor Africa company Secretary.

“This resilience is testament to our disciplined fiscal approach and the operational scale we’re achieving from recent expansion investments.”

Over the nine months to March 31, Innscor’s core manufacturing operations similarly delivered pleasing volume gains.

The Mill-Bake, Beverage and Light Manufacturing, and Protein segments all recorded growth relative to the prior year, underpinned by expanded capacity and intensified focus on optimising bills of materials and exit pricing.

Mr Lorimer noted, “Our capacity-expansion projects are now reaching operational scale and contributing meaningfully to volumes. We remain optimistic, but cautious, about sustaining this trajectory.”

However, margin pressures remain evident, a combination of complex commodity dynamics, higher procurement costs and tight monetary conditions meant that earnings growth to date is broadly in line with the interim period.

As Mr Lorimer explained, “While we are encouraged by volume trends, our priority is ensuring that pricing strategies maintain affordability without eroding margins.”

The Bakery division recorded a 10 percent increase in volumes for the nine months, driven by stable flour supply, improved plant efficiency and the commissioning of a new state-of-the-art production line in Harare, which is expected to be fully operational shortly.

Mr Lorimer commented, “The additional automated line will bolster our capacity and support the national roll-out of the Baker’s Inn Express Shop network, ensuring wider access to our products.”

At National Foods, volume was 22 percent ahead of the comparative period. Strong demand for both baker’s flour and pre-pack flour, Gloria, along with a 58 percent surge in the maize division, reflecting market dynamics from El Niño drought conditions, drove performance.

“The relaxation of India’s rice export ban has gradually eased input costs for our Downpacked division, and we continue to advocate for VAT removal on rice to support consumer affordability,” Mr Lorimer added.

After facing headwinds in the first half, the Protein segment saw volumes recover in the third quarter, tracking marginally ahead year-on-year.

In Colcom Foods and Triple C Pigs, group subsidiaries under the Associated Meat Packers umbrella, nine-month volumes were 3 percent ahead of last year, led by a 19 percent gain in fresh pork, even as processed meat categories faced intermittent retail trade challenges.

“We are encouraged by the recovery in quarter 3 and the efficiencies from our genetics and optimisation efforts,” said Mr Lorimer.

Irvine’s freezer poultry and table-egg volumes rose by 4 percent and 11 percent respectively, though profit margins stayed compressed. Associated Meat Packers delivered a 4 percent aggregate volume increase, with beef up 8 percent and a marginal contraction in chicken, offset by stronger sales through the Texas retail network.

Natpak’s packaging volumes were 9 percent above the prior period, led by sacks and flexibles, while rigid packaging and corrugated volumes held steady.

Prodairy achieved 27 percent volume growth in milk, dairy blend and maheu under the Life and Revive brands, reflecting increased raw milk supply and successful plant extensions. Mafuro Farming’s raw milk volumes rose 14 percent, driven by pasture optimisation and herd maturity.

However, Probottlers’ volumes remained flat year-on-year as the Sugar Excise Duty dampened Bally House cordial and Fizzi CSD sales, partially offset by gains in water and sports drinks, H2go and Activ8, respectively.

Among associates, TBBC’s sorghum beer, Nyathi, maintained a strong volume trajectory with continued focus on product quality and consumer promotions. Nutrimaster’s fertiliser volumes fell 16 percent due to inconsistent rainfall and planting delays, though agrochemical sales under Opti Chem grew.

Profeeds volumes were 4 percent down following a silo collapse in November 2023; however, December 2024 saw commissioning of a world-class automated plant in Bulawayo, with encouraging initial uptake.

Profarmer’s 61-store retail network delivered firm growth in stockfeed, fertiliser, seed and poultry categories, and Probrands posted 11 percent aggregate volume growth despite a rice contraction.

Looking ahead, Innscor emphasised fiscal discipline, cost containment and procurement efficiency to navigate inflationary and currency volatility.

“Our investment in capacity and route-to-market optimisation positions us well for the year-end,” Mr Lorimer observed. “Maintaining product affordability and operational agility will be critical as we head into the fourth quarter.”

The update underscores Innscor’s balanced approach of harnessing expansion gains to drive volumes while deploying targeted pricing and cost-management measures to protect margins.

As capacity projects reach full scale and consumer demand remains firm, the group aims to sustain its growth momentum into the close of the financial year.-herald