Mishma Chakanyuka, Staff Writer 
IH SECURITIES says volumes sold in National Foods Holdings (NatFoods) maize and stock feeds divisions are likely to be weak in the last quarter of the fiscal year 2023, due to the projected over-supply of the harvest on the domestic market.
This comes as Zimbabwe is expecting a bumper harvest for the 2022-23 crop, which will likely see the country having an oversupply of the produce.
“In the same vein, the raw material pipeline for NatFoods from the domestic market looks promising as the company has invested US$12 million into the summer crop contract scheme, lessening its import bill. NatFoods has continued with its ongoing capacity expansion initiatives providing volumes upside,” IH Securities said.
NatFoods is currently looking at near-term projects, which include the commissioning of a new flour mill in Bulawayo.
In a recent note, the local research firm said partial recovery in volumes performance for the group is expected on the backdrop of the cut in interest rates and hike in civil servants’ salaries.
“Monetary authorities have gradually been easing the contractionary measures as inflationary pressures dissipate.
“Interest rates have since been reviewed downwards twice since the beginning of the year going into alleviating liquidity challenges in the market,” IH Securities said.
“Civil servants have also been granted a 100 percent salary increment going into the second quarter of the year, whilst the summer crop marketing season has also kicked off, increasing liquidity in consumers’ hands.”
NatFoods is currently looking at near-term projects, which include the commissioning of a new flour mill in Bulawayo that will see wheat milling capacity increase by an additional 2 000 metric tonnes, a breakfast cereal plant and a new biscuit line.
The board also approved a US$5,3 million upgrade of the Harare rice plant, a further investment of US$1,5 million in the hard snacks category and an investment into a domestic pasta plant.
“Strategic focus for management will be on optimising trading performance and implementation of projects to transform NatFoods from a producer of basic food commodities into a more diversified FMCG player with a larger basket of products,” read the earnings update.
Meanwhile, the group’s revenue for the half year under review grew by eight percent in the period to US$166,96 million despite negative volumes growth, while earnings before interest, taxes, depreciation and amortisation margins slowed from 10,9 percent in the first half to 8,4 percent within the period as many cost lines effectively dollarised.
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