Seed Co bullish on regional operations
Zimbabwe’s largest seed company Seed Co is optimistic that business activity in its regional operations will pick up, buoyed by food security programmes across the continent.
The outbreak of coronavirus pandemic has increased food vulnerability for many countries across the world especially in developing nations due to production times disruptions. This has created scope for many countries to embark on food security programmes to offset the adverse impacts of the global Covid-19 pandemic.
Seed Co has operations in over 15 African countries. It is involved in the breeding, multiplication and distribution of mainly hybrid seed varieties for the following crops: maize, wheat, soya beans, sugar beans, cowpeas, sorghum, groundnuts and vegetables.
“The regional business is poised to benefit from a major food security drive across the continent amidst the Covid-19 pandemic,” said the group in a statement accompanying financial results for the half year to September 30, 2020.
Declared a pandemic by the World Health Organisation (WHO) on March 11 2020, nearly 1,8 million people have succumbed to the deadly virus with confirmed cases at about 80,8 million, according to Johns Hopkins University. Beyond its impact on human health (materialised by morbidity and mortality), coronavirus has disrupted an interconnected world economy through global value chains.
Currently, the world is grappling with the new wave and many countries, including Zimbabwe have imposed tough restrictions to curb the spread of the virus.
Seed Co said it is also banking on the anticipated good rains expected this season.
“With initial weather forecasts indicating normal to above normal rainfall, seed demand is expected to remain strong though the prolonged dry spell may push back the anticipated start to the planting season which could impact the group’s varietal sales mix.”
During the six months to September 30, 2020, maize seed sales volumes doubled, while wheat seed sales volumes went up by 10 percent. Total revenue for the period jumped 55 percent to $975 million from $627 million recorded during the same period in the prior year comparable period. Profit for the period came in at $2,2 billion from $656 million achieved during the same period last year. The group’s profit performance was underpinned by the strong sales volume growth and selling price increases effected in response to the inflation induced rise in operating costs.
“Increased focus on local wheat production to reduce import dependence and improved irrigation capacity due to better electricity supply drove the increase in wheat seed sales volumes.
“In addition, there was increased uptake of maize seed on the back of a Lowveld winter grain production initiative targeted to enhance food security in the Masvingo province in the wake of recent devastating droughts in that area,” said Seed Co.
During the half year, capital expenditure was mainly directed towards the artificial seed dryer project whose completion was delayed by a combination of foreign currency shortages, liquidity challenges and Covid-19 restrictions. Both capital expenditure and seed production were financed by expensive local borrowings which are expected to unwind in the second half when the main selling period commences.-herald.cl.zw
