Natfoods bemoans forex shortages

HARARE - National Foods Holdings (Natfoods) says it experienced supply gaps on product lines that require imported raw materials during the four months to September 30, 2018 due to foreign currency shortages.

Micheal Lashbrook, the group’s chief executive, said foreign currency shortages had resulted in inconsistent supplies of a selected imported product on their shelves.

“Product supply has been largely consistent to the market in most categories although supplies of some products which use imported raw materials such as cooking oil and salt have been impacted by foreign currency availability,” he said in a trading update at the group’s annual general meeting on Monday.

Natfoods operations span from flour and maize milling business, prepackaging and sale of dry groceries. The group is also involved in manufacturing of stock feeds and is in edible oils production through 40 percent holding in Pure Oil Industries, which produces Pure Drop cooking oil.

The continued shortage of foreign currency is making it difficult for industries to import raw materials for use in their production processes, hampering the growth of manufacturing in Zimbabwe.

The Government in 2016 introduced bond notes as a way of bringing liquidity and stability in the economy but many industries have shut down as the country does not have adequate foreign currency

Natfoods said its profit margins suffered after it failed to raise prices in alignment with inflation developments in Zimbabwe during the year ended June 30,2018.

The group, however, recorded a reasonable performance for the period, posting a profit before tax of $21,21 million which was 23 percent above the same period last year.

Operating profit for the period increased by 14 percent compared to last year, weighed down by “a very disappointing performance from the flour division”, despite the record flour volumes achieved during the period.

Overall, the group’s profit after tax was up by 25 percent to $17 million, from $13 million in the comparable period in 2017.

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