NATIONAL Foods says it has adequate stocks of raw materials and is not worried about the expected El Niño weather conditions impacting its products’ availability.
Zimbabwe is expected to receive normal to below-normal rainfall in the coming summer season, with analysts fearing that it will pose a serious threat to economic growth going into next year.
“We have adequate raw materials at the moment, no issues in terms of raw materials supply in our core brands, maize, soya and wheat.
“I think the only challenge you have seen globally is that India has banned rice exports and it’s a major rice exporter. We have, however, managed to source rice from other countries,” National Foods chief executive, Michael Lashbrook, said in an interview with The Financial Gazette.
“If El Niño leads to challenges, we are acting in good time. We are not worried from an availability perspective. We are expecting a little bit of a tougher season, but fortunately, government has been very proactive.”
During the third quarter ended March 31, 2023, the group’s volumes for the year to date at 418 000 tonnes declined by five percent compared to last year, although after a very constrained first quarter, there has been some recovery in the last two quarters.
According to the group, the decline in volume has been mainly in the flour unit.
“This has been driven firstly by higher wheat prices globally which, in turn, have led to increased bread prices compared to last year, impacting bread consumption.
“Secondly, several new players have entered the flour milling market, heightening competition in the category,” the group said. Volumes in the stock-feeds unit have shown encouraging growth in the last two quarters after a difficult first quarter largely driven by the key poultry category.
The maize unit has also shown solid recovery over the last two quarters, which traditionally are the peak period for the business.
The down-packed unit continued to show steady volume improvements mainly driven by value rice, which saw increased volumes on the back of its affordability, notably compared to bread.
At the snack unit, “solid” volume growth was produced for the period, mainly in the hard snacks category while the ‘King’ range continued to lead the market in the soft snacks category.
Cereals witnessed a 42 percent volume improvement.