- Dairibord seeks to merger with Dendairy
- The 2 are leading dairy producers in Zimbabwe
- Dendairy still embroiled in Chilonga saga
JOHANSBURG The country’s leading dairy producer Dairibord said its discussion with Dendairy is still ongoing, according to an extended cautionary statement published on Thursday .The discussions are around the possible acquisition and merger of Zimbabwe’s foremost dairy producer and Dendairy, a private owned company.
Dendairy is a top contender in the dairy space and has grown its market share and investment over the years. While credible industry data has been difficult to obtain, Dendairy’s visibility in the market has grown.
On its website, Dendairy highlights that its business in the dairy space was compelled by gaps it saw in the market space. The company says after identifying that the dairy product market was lagging behind world standards and more imported dairy products were being found in Zimbabwe, they elected to exploit the gap.
While Dairibord as market leaders have maintained that they are holding on to market share, the entrenched impact of competition on the company’s performance coupled with a ravaged economy characterized by a contraction in demand, has put Dairibord on an offensive. The company undertook massive restructuring which saw disposal of non for business, staff rationalization and disposal of the Malawian entity.
On the other end , leveraging on the solid cash flow position of parent Innscor and group synergies, Prodairy has intensified competition in the sector. The case for consolidation of Dairibord with Dendairy could not be any more compelling for the former.
In the midst of the talks, Dendairy hogged limelight in recent weeks as social media went haywire after revelations that the company is behind the Chilonga saga. A government directive issued earlier had said occupants in the Lowveld area should vacate and pave way for a Lurcene project. The project is believed to have been fronted by Dendairy.
Social media lobbied to boycott Dendairy products, but as shown Dairibord is unphrased by the development which it believes, basing on the cautionary statement issued, is not material.
Against all the pressure, Dairibord remains a market leader and its market knowledge, entrenched in its management,’s experience and dynamism shown through the roping in of fresh, young and capable blood within its ranks, creates a competitive advantage and moat that is difficult to dethrone.