Seed Co develops more varieties for regional markets
Victoria Falls Stock Exchange (VFEX) listed seed producer, Seed Co International is developing more seed varieties for both grain and vegetables that suit conditions across its regional markets in an effort to boost agricultural yields and food security.
This comes as bad weather patterns due to climate change have affected production creating scope for more early maturing and cost effective seed varieties.
In an operations update for the year to March 30, 2022, group chief executive officer Morgan Nzwere highlighted several varieties that were released during the financial year while trials for others are also still ongoing.
The group released five new varieties in Zambia, four in Malawi and licensed early
maturing yellow maize varieties in Nigeria as well as a top cross hybrid aimed at
improving ease of production.
Mr Nzwere added the group also licensed a striga tolerant yellow sorghum variety for
commercialisation in Nigeria as well as four rice varieties which were licensed for
commercialisation as well in Zambia and Malawi while pilot productions are ongoing.
This is in addition to SC Signal and SC Saga soyabean varieties officially released in
Malawi while the same were registered in Ethiopia.
According to the group, rice hybrid trials are continuing in Southern, East and West
Africa while potato hybrid registration trials are on-going.
“Several vegetable hybrids are commercialised in our markets,” said Mr Nzwere.
In terms of production, Mr Nzwere indicated that product availability was generally good
during the year though readiness to market was delayed by late dry down due to the
excessive wet prior year (FY21) season.
“Stockouts were experienced in Nigeria and Kenya due to bad production in prior period
seasons (flooding in Nigeria and drought in Kenya).
“2022/23 maize season production now at the intake stage is expected to be 5 percent
higher than prior year’s 32 000 tonnes but might be lower due to erratic rains which
affected growth and pollination. Winter wheat production is also underway in Zambia,”
he said.
Figures from the group show that total sales volumes were 11 percent below prior year
with the main crop — maize down 19 percent due to the 50 percent cut of the government
subsidy contribution in Malawi that also saw Seed Co Malawi volumes declining by 32
percent.
In Zambia, late rains and impact of price increases saw volumes drop by 14 percent while
product unavailability dropped by 34 percent in Nigeria. Other factors such as drought in
Kenya and product shortages resulted in a volume drop of 12 percent.
However, Tanzania’s volume performance was stable as the business consolidated while
the more than doubling of volume in Mozambique helped to partly offset volume loss in
most markets.
In terms of financial performance, the group registered a decline in profitability
recording an after tax profit of US$7,1m down from US$11,1m in the prior year due to
gross margin shrinkage mainly in Zambia as the kwacha appreciated and reduced
economies of scale as volume declined 11 percent — with significant declines in Malawi,
Zambia and Nigeria.
Group finance director John Matorofa attributed the decline to increase in operating
costs due to impact of the strong kwacha in Zambia as well as increased business
activities in Mozambique. Revenue was flat at US$88,5 million albeit on reduced sales
volume, helped mainly by the strengthening of the Zambian kwacha against the USD and
business growth in Mozambique.
Gross margin was subdued on account of reduced economies of scale and the impact of a
stronger Zambian kwacha on cost of sales.
Overheads went up linked to the marketing and selling efforts in anticipation of a normal
season that regrettably turned out adverse.
Despite the uncertainties caused by conflicts in Ukraine as well as uncertainty from
elections scheduled for August in Kenya and March next year for Nigeria, Seed Co
International remains upbeat of its performance on the back of its strategic position in
food production.-The Herald
