Innscor’s mill-bake division volumes plummet on turbulent operating environment

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  • Bakery division registered 36% decline in loaf volumes
  • National Foods’ volumes stood at 456 000mt
  • Group revenue increased by 24%

Harare – Diversified group, Innscor Africa Limited’s mill-bake unit recorded a decline in volumes across all divisions in the year ended 30 June 2020.

The segment comprises of the Bakery Division, National Foods and Profeeds.

The Bakery Division registered a 36% decline in annual loaf volumes compared to the prior comparative period.

Innscor attributed the decline to limited flour availability at the necessary pricing level required to maintain loaf pricing within the regulated pricing framework which characterised the first half of the year which in turn resulted in lower production.

In addition, volumes in the second half were severely affected in April and May following limited accessibility to the large informal sector and reduced trading hours in the formal market as a result of the COVID-19 lockdown.

However, volumes have been recovering since June following the gradual easing of trading restrictions and this has continued into the early part of the new financial year.

“Focus remains on re-building the volume base to pre lock -down levels, widening the product offering, investigating sustainable auxiliary power and water solutions and further automating production”, the Group’s Independent Non-Executive Chairman, Addington Chinake said.

National Foods recorded a 25% drop in volumes to 456 000mt mainly due to reduced consumer purchasing power.

The unit continues to work with Government in operationalizing its maize subsidy programme, with the business having milled in excess of 61 000mt of product for the initiative since launching in December 2019.

“In support of this programme, both the Mutare and Masvingo (Masvingo plant last operated in 1998) mills were re-opened to facilitate product availability and to assist Government in offering relief to the vulnerable sectors of society”, Chinake said.

Profeeds, an associate company of the Group registered a 36% and 25% decrease in feed volumes and day-old chicks volumes respectively.

The decline was within the retail platform which serves the small-scale segment of the market and was a reflection of subdued consumer spending, evolving consumer demand in response to market trading conditions and the effect of the C0VID-19 lockdown restriction had on market dynamics.

However, the Group says the introduction and commissioning of additional fish feed capacity added above-forecast volumes to the year’s results and investment into additional product capability and capacity will continue in the year ahead allowing for further product diversification.

The Group’s revenue increased by 24% to ZWL23.938 billion driven by mixed volume performance, the gradual removal of subsidies on most products, as well as inflation-induced price adjustments

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