DAIRIBORD Zimbabwe Limited (DZL)’s foreign currency earnings surged to 109 % as the nation’s largest milk processor adopted a robust export strategy to counter economic slowdown at home.
In a trading update released Wednesday, DZL company secretary, Mercy Ndoro said the company’s export strategy is paying off lucratively.
“To contribute towards the company’s foreign currency requirements, export revenue for the quarter increased by 109% above prior year and 118% for the cumulative period. The growth is anticipated to continue going forward.”
The milk processor unveiled plans to implement the export strategy early this year.
During the first half of the year, foreign currency revenue surged to US$2.1 million in the first half of 2019 up from US$0.6 million realised in the comparative period last year.
Several companies operating in Zimbabwe are working flat out to export their goods and services against a background of acute foreign currency shortages.
Meanwhile, raw milk intake increased by 2% during the quarter whilst the growth to September was 14% as the group’s cumulative growth was higher than the national growth of 9%.
The growth in raw milk supply mitigated constraints in supply of imported milk powders and the group’s initiatives to grow and sustain local milk production assisted dairy farmers navigate difficulties experienced in obtaining key inputs.
However the business recorded depressed volumes largely due to supply side constraints and to a lesser extent depressed consumer disposable incomes.
Volumes sold during the quarter declined 40% compared to same period in 2018.
Liquid milks declined by 22% for the quarter and 1% for the nine months to September. Volumes were largely impacted by constrained supply of milk powders which was mitigated by growth in raw milk intake.
The group made a strategic decision to mitigate the negative impact of foreign currency risk by reducing foreign liabilities.
Said Ndoro: “To that end, foreign liabilities at the end of September were US$0.822 million (including a long term loan of $0.539 million) from US$1.85 million as at 30 June 2019 and the December 2018 balance of US$3.96 million.”
