NatFoods to install US$5m flour milling plant

DIVERSIFIED agro-industrial concern, National Foods will install a US$5 million stateof-the-art flour milling plant next month at the firm’s factory in Bulawayo.

The move is expected to improve wheat milling capacity by around 2 000 tonnes and will replace the existing flour milling plant at National Foods’ Basch Street factory.

In an abridged statement for the six months period ended December 31, 2021, National Foods said during the period under review, volumes for the flour unit increased by three percent compared to the same period in 2020.

“Volumes for the Flour unit increased by three percent compared to the same period last year, with both the Harare and Bulawayo flour mills running at close to capacity.

“The installation of a new mill at our Bulawayo site will commence in April and the mill remains on track for commissioning towards the end of 2022,” said the milling firm. During the period under review, the group’s revenue increased by 96 percent to $24,9 billion, driven by volume growth and inflationary price increases.

Gross profit grew by 81 percent below revenue growth, largely due to the inflationary driven gains that occurred in 2020.

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“The statement of financial position remains healthy with net debt of only $2,66 billion.
Management remains intensely focused on the optimisation of its working capital and debt positions, particularly in view of the fluid inflationary environment.

“The group remains in a strong position to fund its future growth aspirations,” it said. National Foods also operates maize milling, stock feed, down-packed, biscuits, snacks, cereals and traded goods units.

On the maize milling side, the group said as anticipated demand for maize meal was subdued following the last year’s excellent harvest while volumes declined by seven percent compared to 2020.l From Page 8
The Pearlenta “Smart Carbs” range, meals made from traditional grains such as sorghum and millet, was launched during the period under review.

The stock feed unit saw volumes grow by 16 percent during the period under review when compared to prior year.

“Feed volumes in the poultry category continued to show encouraging growth on the back of increased production in the small-scale sector, whilst beef feed volumes declined following the better summer season and consequent improved pastures,” said the company.

On the down-packed unit, the group said in line with its objective to sharpen focus by category the former groceries unit has been split into a down-packed unit, which manages rice, salt, sugar beans and popcorn and traded goods, which handles canned products, jam, peanut butter and pasta.

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Encouraging volume momentum was sustained in the down-packed unit, with rice volumes increasing by 53 percent and salt by 31 percent relative to the prior period.

The rice category as a whole remains a key focus area as consumers progressively migrate away from maize meal to alternative starches.

“The newly established traded goods unit saw volume growth of 71 percent versus prior year, largely as a result of growth in the pasta category. Snacks volumes in this division increased by 49 percent against the prior period, as the increased production capacity came on stream.

“Our expectation is that the category will show robust growth in future in line with steadily improved consumer spending power,” it said.

National Foods said the Iris biscuit brand made further headway in the loose biscuit segment with volumes increasing by 19 percent compared to 2020.

The existing plant ran at capacity during the period as a result of which the prospects for additional investment in the biscuit category are currently being assessed.

It said 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.

“The ‘Smart Carbs’ cereal range is derived from traditional grains such as sorghum and millet and has been developed with the health-conscious consumer in mind.
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“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,” said National Foods.-chronicle.co.zw