RBZ struggles with $4,9m NatFoods debt

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NATIONAL Foods (NatFoods), one of Zimbabwe’s food processing giants, is struggling to import raw materials after the central bank failed to remit its US$54,9 million legacy debt owed to a foreign supplier.
Earlier this year, NatFoods announced that the Reserve Bank of Zimbabwe had assumed its debt in a move meant to allow the company to continue operating its flour milling unit, which it had warned was on the brink of closing down due to delays in payment of foreign suppliers.
However, South African foods giant Tiger Brands, which owns a 37 percent stake in NatFoods, said the foreign currency liquidity challenges were affecting its operations in Zimbabwe.
“The challenge of trading sustainably in this environment for NatFoods has been exacerbated by the delays of the Reserve Bank of Zimbabwe (RBZ) in making payments of debts to the major supplier of NatFoods, which were assumed by the reserve bank as part of a funding agreement concluded during the period under review,” the company said.
Todd Moyo, NatFoods’ chairman, recently indicated that the company has however settled the full amount, in domestic currency, to the reserve bank, a development he says resulted in a reduction in the group’s creditors on its books.

“Regrettably, shortly after the period end, the RBZ has had to delay payments on the facility, which in turn has disrupted flour supplies to the market,” he said in a statement accompanying the group’s unaudited results for the six months ended December 31, 2018.
“The group continues to work closely with the RBZ to resolve the matter and remains fully capacitated to produce adequate volumes of flour provided the necessary foreign currency to import wheat is availed,” Moyo said.
Meanwhile, Tiger Brands said its income from associates decreased by 41 percent to R200 million. The company however says its associates Carozzi and UAC Foods “produced solid performances”, with NatFoods “performing satisfactorily”.
NatFoods posted a profit after tax of $16,8 million, which was 78 percent above the same period last year.
The group’s volumes grew 18,4 percent over the prior period, driven mainly by stockfeeds “as the poultry sector recovered from the Avian Influenza outbreak” and maize “on the back of a poorer local maize harvest and the fact that household maize retentions were reduced on account of the attractive GMB price”.
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