Zambia’s failings hold back SeedCo

THE performance of SeedCo’s Zambian unit during the year ended March 2018 was held back by inefficiencies in the administration of agriculture in that territory, the seed company’s chief executive officer Morgan Nzwere  has revealed.
Nzwere recently told analysts that the Zambian unit, which is the company’s second biggest operation after the Zimbabwean business, had challenges emanating from inefficiencies in the agriculture administration. He said distribution of vouchers in the sourthern African nation’s agro-inputs programme was delayed and had a negative bearing on the pan-African seed company.
“In Zambia, the business suffered a setback because the government there announced an input programme, but then distributed the vouchers late. In fact, the vouchers ended up being distributed in December and January and by then the planting period had almost passed. So farmers ended up using the vouchers for fertilisers and other inputs instead of seed,” he said.
The situation was compounded by less than motivating prices offered for maize during the past 12 months in Zambia, as well as government’s problems in paying farmers for their produce.
“The commodity price of maize in Zambia slumped to an all-time low of about $120 and this discouraged farmers from further planting. The central buyer, the Food Reserve Agency, also did not have enough cash and they had problems paying the farmers for product supplied during the preceding year,” Nzwere added.
The Zambian unit, however, made significant exports to Angola, which somewhat helped the situation. In all, the unit’s margins fell by four percent largely due to shortages of long season maize varieties.
During the year ended March 31, 2018 in which SeedCo recorded a profit after tax of $21,4 million on the back of revenues of $128,5 million, the Zambia business accounted for 29 percent of the group’s volumes while the Zimbabwe unit contributed 43 percent.
Malawi and Tanzania contributed eight percent, respectively, with the other businesses making up the remaining 12 percent.
The Zimbabwe Stock Exchange-listed company has decided to unbundle its regional businesses in order to enhance the respective units’ capacity to raise capital to finance research and development, among other reasons.
The Malawi unit, which for the past two years had been making losses, turned a profit after tax of $1 million during the period under review. The company has restructured the balance sheet of the unit in addition to appointing new management and introducing new marketing systems.
Nzwere said the company’s Nigeria business got production for the first time during the period under review. He said even though the production was not very big, it was significant relative to what the company has been trying to do in that territory over the years.
newsdesk@fingaz.co